Bitcoin Slides Below $85.5K as Market Faces Selling Pressure and Rising Rate Concerns

Bitcoin extended its decline Friday morning in Hong Kong, falling below $85,500 according to CoinDesk data, as renewed selling pressure and shifting global interest-rate expectations weighed on the market. The drop leaves BTC down more than 7% in the past 24 hours and over 20% for the month, a sharper pullback than equities, which remain relatively resilient thanks to strong earnings from Nvidia that helped temper concerns about an AI-driven market bubble.

Market maker FlowDesk reported on Telegram that large amounts of long-dormant bitcoin have been flowing into centralized exchanges, with tens of thousands of coins moving after years of inactivity. This sudden increase in supply has outpaced demand, overwhelming bids and pushing market sentiment decisively toward sellers. FlowDesk noted that many managers are now reducing risk heading into year-end, prioritizing capital preservation over new exposure. This defensive positioning has thinned liquidity at important support levels, making BTC more vulnerable to sharper moves.

Derivatives activity is echoing the weakness in spot markets. FlowDesk highlighted heavy downside flows in both BTC and ETH options, with traders rolling put positions to lower strikes to maintain protection as volatility remains skewed toward bearish bets. Data from Deribit supports this trend, showing a sentiment shift as the once-popular $140,000 call has been overtaken by the $85,000 put, now the largest open-interest strike in the bitcoin options market.

Meanwhile, attention is turning to MicroStrategy (MSTR) as Bitcoin’s price nears the company’s average break-even point of $74,430. JPMorgan recently noted that MSTR’s stock underperformance reflects rising concerns about a possible removal from the MSCI index in January—a move that could force billions in passive outflows and add additional pressure to an already fragile crypto landscape.

The combination of heavy supply, defensive positioning, and macro uncertainty continues to shape a cautious outlook for Bitcoin as traders brace for further volatility.