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Bitcoin Free Fall Today: Bitcoin is falling sharply. Traders are preparing for the drop to get even worse. The world’s biggest cryptocurrency slipped under $90,000 on Tuesday morning in Asian trading.
The selloff has now wiped out every gain it made this year. In the options market, traders are ramping up their bearish positions.
Many are convinced the decline still has a long way to go. Large investors have pulled back, and their exit is adding to the pressure.
Market sentiment has turned sharply.
The change has come fast and without warning. Demand for downside protection at $85,000 and $80,000 has climbed rapidly.
Options tied to those levels, especially those expiring later this month, are seeing strong activity. The data comes from Deribit, a platform owned by Coinbase.
Just weeks after chasing Bitcoin’s rally, traders have rushed into bearish contracts. They have purchased more than $740 million in bets expecting further declines through late November. Those bearish wagers now far outweigh any interest in bullish positions.
“The market is showing a clear shortage of real spot buying,” said Chris Newhouse, director of research at Ergonia, a firm focused on decentralized finance.
He added that investors who loaded up on positions over the past six months are now sitting on steep losses.
The biggest losses are landing on companies that act as digital-asset treasuries. These firms built up large crypto holdings earlier this year to position themselves as stock-market bets on the sector.
Michael Saylor’s Strategy Inc. is still buying, adding another $835 million in Bitcoin. But many of its peers are feeling the strain. Some are now being pushed to unload assets to protect their balance sheets.
The selloff has created a lingering psychological weight on the market. Investors are sitting on losses that feel too large to add to their positions. Yet many still aren’t willing to cut their stakes and walk away.
A sentiment index from CoinMarketCap tracks momentum, volatility, derivatives, and several other indicators. Its latest reading shows the crypto market firmly locked in a state of “extreme fear.”
Wider economic concerns are also dragging on market sentiment. Traders are focused on Nvidia’s earnings report due Wednesday, which often signals how tech and speculative assets might move.
They’re also rethinking the chances of a Federal Reserve rate cut in December. The S&P 500 fell more than 1%. That slide has dampened appetite for risk across the board.
“The Fed’s stance and growing talk of an AI bubble are creating two major hurdles for crypto and other risk assets as the year winds down,” said Adam McCarthy, a research analyst at Kaiko.
He explained that anxiety around AI is spilling into the crypto market. When that pressure is combined with recent comments from FOMC officials, he expects Bitcoin to stay on a downward path.
Ether is being hit even harder. The world’s second-largest cryptocurrency slid to $2,946 on Tuesday. Its losses now exceed 20% since early October.
“Ether is highly exposed right now because major digital-asset treasury firms are deep in the red on their holdings,” said Greg Magadini, director of derivatives at Amberdata.
The broader crypto market has been shaken since a heavy liquidation wave in early October erased nearly $19 billion in value.
Open interest in crypto futures has also pulled back.
The decline is most severe in smaller tokens like Solana, where positioning has dropped by more than half, according to Coinglass data.
“That risk-off attitude is bleeding into the crypto space,” said Thomas Perfumo, global economist at Kraken. He said sentiment remains shaky.
He also stressed that the latest decline stems from broader macro concerns, not from weaknesses in the crypto market itself.
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