Bitcoin’s fall below $84,000 confused analysts as the stock, gold and AI sectors hit all-time highs, creating one of the strangest divergences in crypto.
The cryptocurrency market opened December with another big drop, with data from CoinGecko showing Bitcoin (BTC) falling below $84,000 on its first day, dragging its total market value below $3 trillion.
The dip doesn’t feel good to some sector watchers as it comes amid record performance in traditional stocks, gold and other risky assets.
A stunning anomaly of macro tailwinds
Jeff Dorman, Chief Investment Officer at Arca, called the current trend “one of the strangest crypto selloffs ever” in a post on X on December 2.
He pointed out that Wall Street is witnessing strong bullish conditions: the Federal Reserve is expected to cut rates, quantitative tightening has ended, consumer spending is strong and corporate profits are growing. These factors have pushed stocks and gold to repeated highs.
At the same time, the typical catalysts blamed for crypto weakness have not surfaced or been debunked.
“MSTR is not selling, Tether is not insolvent… the Fed is not getting aggressive,” Dorman noted, referencing common negative narratives surrounding Strategy and the stablecoin issuer.
His conclusion is that the issue may be structural but is nevertheless simple: although institutional adoption is progressing, new capital is not yet flowing through traditional investment systems.
You might also like:
“Crypto-native investors are exhausted and no new money is coming in,” he wrote.
In a separate blog post, Wall Street is also standing firm suggested That selling pressure can now come from outside the crypto industry, from traditional financial portfolios where crypto holdings are liquidated first during portfolio adjustments, and this is a flow that is less transparent to the crypto community.
The clearing of leverage and a search for explanations
The recent decline was exacerbated by a shock from the Bank of Japan (BOJ), which announced a potential rate hike on December 1. As a trading company Wintermute explained In a market update, the news threatened the long-standing carry trade in the yen, leading to a deleveraging that hit crypto during a period of lean holiday liquidity.
But beneath the surface, some market mechanisms are improving. According to Wintermute’s analysis, excessive debt has been reduced, with total perpetual open interest falling to $135 billion from about $230 billion in October.
In addition, financing rates have normalized and spot trading now represents a larger share of volume, a situation that the company’s experts believe will help create a healthier foundation as macro conditions stabilize.
Some observers also see a potential recovery for BTC in the near future. Fundstrat’s Tom Lee predicted in a CNBC interview that the flagship crypto could hit a new all-time high by the end of January, citing expected Fed policy and a recovery in stocks.
He likened the current market to a deleveraging, similar to past events, that could soon come to an end. For now, however, the market is still waiting to see if cleaner positioning and potential macro shifts will allow cryptocurrencies to finally join the broader rally.
SECRET PARTNERSHIP BONUS for CryptoPotato readers: Use this link to register and unlock $1,500 in exclusive BingX Exchange rewards (limited time offer).
#Crypto #selloff #puzzles #Wall #Street #veteran #stocks #gold #wave