Bitcoin Retracement on December 1, 2025 Reintroduces Market Volatility

This analysis is based on The Wall Street Journal’s December 1, 2025 report [4] and supplementary market data [0][1][2][3]. Bitcoin’s retracement follows brief late-November stabilization, with the cryptocurrency dropping 7-8% in 24 hours to trade between $84,000 and $85,636 [1][3]. This deepens its bear market, down 32-33% from the October 2025 ATH of ~$126,200 [2][3]. The broader crypto market also suffered: Ethereum (ETH) fell 8.65-9.52%, XRP 9.4%, and Solana (SOL) 10.35% [1], with the total crypto market cap declining 7.22% to $2.89 trillion (one-third off its October peak) [1].

Catalysts for the retracement include a confluence of macro and market-specific factors. Japan’s 10-year bond yield surged to 1.84% (2008 high), triggering global risk-off sentiment [1]. This was compounded by $1 billion in crypto derivatives liquidations (90% long positions) in 24 hours [1], creating a feedback loop of selling pressure. Further, macro policy uncertainty—split views on 2026 Fed rate cuts and Bank of Japan (BoJ) rate hike hints—weighed on investor sentiment [2]. Market liquidity has also deteriorated, with Bitcoin’s market depth falling from $766.4 million to ~$568.7 million since October [2], amplifying volatility. Additionally, concerns over the largest corporate Bitcoin holder (holding ~650,000 BTC, ~3% of total supply) possibly selling if its modified net asset value (mNAV) drops below 1 added to jitters [2].

Technical indicators confirm bearish momentum: the 50-day exponential moving average (EMA) crossed below the 200-day EMA (death cross), the Average Directional Index (ADX) at 40 signals a strong downtrend, and the next Fibonacci support is at ~$70,684 [1]. Sentiment indicators reflect fear: the Crypto Fear & Greed Index hit 20 (its most fearful level since early April 2025) [1].

1. Bitcoin’s increasing correlation with traditional macroeconomic factors (Japan’s bond yields, central bank policies) highlights its growing integration into global risk asset markets, which may shape long-term institutional sentiment [1][2].
2. Reduced market liquidity (down 26% since October) means future large trades could trigger more extreme price swings, indicating elevated short-term volatility risk [2].
3. The largest corporate Bitcoin holder’s potential selling (if mNAV <1) represents a systemic risk, as unloading ~3% of total BTC supply could significantly impact prices [2].
4. The death cross and ADX level confirm a sustained bear market, suggesting the retracement is not a short-term correction but part of a longer downturn [1].

• Continued Volatility
  : Diminished liquidity makes the market more susceptible to price swings from large orders [2].
• Strategic Selling
  : If the corporate holder’s mNAV falls below 1, selling could trigger further declines [2].
• Macro Uncertainty
  : Ongoing central bank policy decisions (Fed, BoJ) may continue to weigh on risk assets, including Bitcoin [1][2].
• Technical Support Breach
  : A drop below the current ~$84,000 support could lead to declines to ~$70,684 [1].

• Long-Term Entry Points
  : For investors with a long-term horizon, current prices represent a significant discount from the October ATH, though risks remain elevated [3].
• Sentiment Reversal Potential
  : Extreme fear levels historically precede market rebounds, though timing is uncertain [1].

• Bitcoin price: ~$84,000-$85,636 (7-8% 24hr decline, 32-33% off October ATH) [1][2][3].
• Total crypto market cap: $2.89 trillion (-7.22% 24hr) [1].
• Derivatives liquidations: $1 billion (90% long positions) [1].
• Bitcoin market depth: ~$568.7 million (down from $766.4 million in October) [2].
• Spot Bitcoin fund outflows: $3.5 billion in November 2025 [2].
• Sentiment: Crypto Fear & Greed Index = 20 (Fearful) [1].