5 Reasons Bitcoin Fell to $85,000 and Why More Downside Is Possible

Bitcoin fell to the $85,000 level, erasing over $100 billion from the crypto market cap, driven by five overlapping factors. The primary macro catalyst was fear surrounding an impending Bank of Japan (BOJ) rate hike, which historically triggers the unwinding of the yen carry trade, causing investors to sell risk assets like Bitcoin. This was compounded by uncertainty over future US Federal Reserve policy following recent rate cuts, as Bitcoin increasingly trades as a macro asset. The decline was accelerated by heavy leverage liquidations, where over $200 million in long positions were automatically sold, creating a feedback loop. Furthermore, the drop occurred during thin weekend liquidity, magnifying price swings, and significant spot market pressure was added by major market maker Wintermute, which reportedly sold over $1.5 billion in BTC to rebalance risk. Future price action depends on whether the BOJ confirms a hike and if US data revives rate-cut expectations, but the current drop is viewed as a macro-driven reset.

(Source：BeInCrypto)