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Arthur

Bitcoin (<a href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow" target="https://cointelegraph.com/bitcoin-price">BTC</a>) experienced a sharp pullback in early Asian trading on Monday, dropping to $85,500 amid increasing expectations of a December rate hike by the Bank of Japan (BOJ).
Key takeaways:
<ul>
 <li>Bitcoin dropped 5% to almost $85,000 in a marketwide correction, liquidating $656 million in longs.</li>
 <li>Mounting expectations for a BOJ rate hike at its Dec. 18-19 meeting weighed on the BTC price.</li>
 <li>Bitcoin’s bear flag projects a potential drop to $67,700.</li>
</ul>
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-12/019ad8e0-b9c7-7f1c-94d6-fb40498ebde6" title="" alt="Bitcoin price slides to $85K: How low can BTC go in December?">
 <figcaption style="text-align: center;">
 BTC/USD hourly chart. Source: Cointelegraph/<a href="https://www.tradingview.com/x/XymdJwsK/" rel="noopener noreferrer nofollow" target="_blank">TradingView</a>
 </figcaption>
</figure>
<h2 id="bitcoin-wipes-out-liquidity-in-tumble">Bitcoin wipes out liquidity in tumble</h2>
BTC price fell as low as $85,616 on Monday, <a href="https://cointelegraph.com/news/bitcoin-dip-5-percent-sunday-slam-liquidations-surge?utm_source=rss_feed&amp;utm_medium=rss&amp;utm_campaign=rss_partner_inbound" rel="noopener noreferrer nofollow">down 5.5% in the past 24 hours</a>, amid a broader market retreat.
This extended the drawdown from the <a href="https://cointelegraph.com/news/bitcoin-on-exchanges-falls-to-six-year-low-as-btc-returns-to-124k" rel="noopener noreferrer nofollow" target="_self">Oct. 6 all-time high of $126,000</a> to 32% and was accompanied by massive liquidations across the derivatives market.
Related: <a href="https://cointelegraph.com/news/fed-rate-cut-bets-surge-can-bitcoin-finally-break-91k-dollars" rel="noopener noreferrer nofollow">Fed rate-cut bets surge: Can Bitcoin finally break $91K to go higher?</a>&nbsp;
More than $564.3 million in long positions was liquidated, with Bitcoin accounting for $188.5 million of that. Ether (<a href="https://cointelegraph.com/ethereum-price" rel="noopener noreferrer nofollow" target="_self">ETH</a>) followed with $139.6 million in long liquidations.
Across the board, a total of $641 million was wiped out of the market in short and long positions, as shown in the figure below.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-12/019ad8e0-c4e5-7f9c-823c-b5ab29fd7802" title="" alt="Bitcoin price slides to $85K: How low can BTC go in December?">
 <figcaption style="text-align: center;">
 Crypto liquidations (screenshot). Source: CoinGlass
 </figcaption>
</figure>
Several analysts attribute the downside to surging expectations for a BOJ rate hike at its Dec. 18-19 meeting. This potential tightening — Japan’s first since January — has amplified concerns about <a href="https://cointelegraph.com/news/japan-10-year-government-bond-yield-jumps-highest-level-since-2008" rel="noopener noreferrer nofollow">unwinding the massive yen carry trade</a>, pressuring risk assets such as cryptocurrencies.
“​​$BTC dumped cause BOJ put Dec rate hike in play,” <a href="https://x.com/CryptoHayes/status/1995368658940612945?s=20" rel="noopener noreferrer nofollow" target="_blank">said</a> BitMEX co-founder Arthur Hayes in an X post on Monday, adding that a USD/JPY rate of between 155 and 160 “makes BOJ hawkish.”&nbsp;
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-12/019ad8e0-ca8a-70c7-ba6d-5b0d4f0729c8" title="" alt="Bitcoin price slides to $85K: How low can BTC go in December?">
 <figcaption style="text-align: center;">
 BTC/JPY chart. Source: Arthur Hayes
 </figcaption>
</figure>
Japanese yields are spiking with the two-year at its highest level since 2008. The yen is also surging, <a href="https://x.com/nicrypto/status/1995339128653943174?s=20" rel="noopener noreferrer nofollow" target="_blank">said</a> co-founder and CEO of Coinbureau Nic in his latest post on X.&nbsp;
As a result, “bond investors place a 76% chance of a BoJ rate hike on Dec. 19,” Nic wrote, adding:
<blockquote>
 “An increase in Japanese base rates and strengthening of Yen leads to an unwind of the carry trade (borrowing in Yen, buying risk assets). ”
</blockquote>
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-12/019ad8e0-ce9d-77a2-8f58-eae3e60a7a95" title="" alt="Bitcoin price slides to $85K: How low can BTC go in December?">
 <figcaption style="text-align: center;">
 Japanese two-year yields. Source: Nick
 </figcaption>
</figure>
A Reuters poll showed that <a href="https://www.reuters.com/world/asia-pacific/boj-set-hike-interest-rates-december-decision-knife-edge-2025-11-20/" rel="noopener noreferrer nofollow" target="_blank">53% of economists expect a hike</a>, up from prior months, driven by risks of imported inflation and fading political pressure for easing. Polymarket bettors now <a href="https://polymarket.com/event/bank-of-japan-decision-in-december?tid=1764571447358" rel="noopener noreferrer nofollow" target="_blank">project a 52% chance of a 25 bps increase</a> at the Dec. 19 meeting.&nbsp;
A stronger yen from higher rates makes carry trades costlier, prompting investors to unwind positions en masse. This forces the sale of risk assets, as seen in August 2024, when a surprise BOJ hike triggered a 20% BTC price crash to $49,000 and $1.7 billion in liquidations.
<h2 id="br-how-low-can-bitcoin-price-go"> How low can Bitcoin price go?</h2>
The Bitcoin liquidation heatmap showed the price eating away liquidity around $86,000, with millions in bid orders still sitting between the spot price and $79,600
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-12/019ad8e0-dbe4-7f79-a6d2-af6d6b1df8f7" title="" alt="Bitcoin price slides to $85K: How low can BTC go in December?">
 <figcaption style="text-align: center;">
 BTC/USDT liquidation heatmap. Source: CoinGlass
 </figcaption>
</figure>
This suggests that Bitcoin’s price might drop further to sweep this liquidity before staging any recovery.
From a technical perspective, the price has validated a bear flag on the daily chart after dropping below the lower boundary of the flag at $90,300 on Monday.
A daily candlestick close below this level would confirm the continuation of the downtrend toward the measured target of the flag at $67,700 (near 2021 all-time highs). Such a move would bring the total losses to $21%. 
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-12/019ad8e0-e30b-7227-935f-1ac387dcdfe2" title="" alt="Bitcoin price slides to $85K: How low can BTC go in December?">
 <figcaption style="text-align: center;">
 BTC/USD daily chart. Source: Cointelegraph/<a href="https://www.tradingview.com/x/zdrzkfsh/" rel="noopener noreferrer nofollow" target="_blank">TradingView</a>
 </figcaption>
</figure>
Veteran trader Peter Brandit <a href="https://x.com/PeterLBrandt/status/1995322684776054898?s=20" rel="noopener noreferrer nofollow" target="_blank">shared a chart showing</a> that Bitcoin’s macro downtrend could find support within the lower green zone, which lies between $45,000 and $70,000.
<blockquote class="twitter-tweet">
 Not to bust anyone's banana, but the upper boundary of the lower green zone starts at sub $70s with lower boundary support in the mid $40s. How soon before Saylor's Shipmates ask about the life-boats? <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">$BTC</a> <a href="https://t.co/YLfjSDdw9H" rel="noopener noreferrer nofollow">pic.twitter.com/YLfjSDdw9H</a>— Peter Brandt (@PeterLBrandt) <a href="https://twitter.com/PeterLBrandt/status/1995322684776054898?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">December 1, 2025</a>
</blockquote>
&nbsp;
As <a href="https://cointelegraph.com/news/bitcoin-2022-bear-market-correlation-98-percent-etfs-add-220m" rel="noopener noreferrer nofollow">Cointelegraph reported</a>, Bitcoin is following the 2022 bear market trajectory so far, with a near 100% correlation in 2025. The true BTC price rebound may not occur until well into the first quarter of next year if this trend continues.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin price slides to $85K: How low can BTC go in December?

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