China Strikes Again, Sending Bitcoin Price into Freefall #
December didn’t begin with snow and lights this year, but with a sharp blow to the crypto market. In a matter of minutes, bitcoin plummeted from $90,000 to $85,000. This nosedive resulted in a staggering $900 million in liquidated long positions. The cause? A combination of geopolitical unrest, tighter monetary policy, and a fragile market structure.
China Puts Pressure on Crypto, Investors Flee #
Once again, it’s China throwing a wrench in the works with a stark statement. The central bank reiterated that stablecoins pose a threat to financial stability and is demanding stricter enforcement in the crypto sector. Although crypto has been banned in China since 2021, this signal came at a time of heightened debt and leverage, making it particularly painful. Stablecoins are the backbone of liquidity in crypto—any threat to them causes immediate panic on both centralized and decentralized markets. Meanwhile, we’re seeing major players moving into stablecoins like USDT. Capital preservation is clearly the priority. Investors are waiting to see what Federal Reserve Chairman Jerome Powell will say in his upcoming speech. Whether it will truly address interest rate cuts remains unclear. But the nervousness in the market is palpable. Add to that the fact that November was the weakest trading month since June, and you understand why many investors are now sitting on the sidelines.
Bitcoin Price Outlook: Bottoms Between $40,000 and $50,000? #
Technically, the chart is doing exactly what we discussed earlier: volume is drying up, liquidity is draining away, and the price is reacting sharply. If the cycle repeats, the bitcoin price could move towards a bottom between $40,000 and $50,000. This area has been strong in the past and aligns with the support zones on the chart. It would fit a scenario where we only form a new bottom around the fourth quarter of 2026. USDT dominance is rising, which usually indicates risk-averse behavior. The US dollar is also lingering just below a key resistance level, which historically is not a good sign for crypto. Nevertheless, this is a time to understand the playing field, not to panic. It’s about strategic thinking about what’s to come, not blind bullishness or bearishness.