Bitcoin fell below $90,000 on Monday, as a selloff gathered pace following the steepest monthly decline since mid 2021, as renewed risk aversion drove investors out of stocks and digital assets.
The world’s largest cryptocurrency fell by as much as 6.1% at one point. By 1120 GMT, it was down 5.2% at $86,461, set for its biggest one-day fall in a month and hovering near last month’s eight-month low of $80,553.
Bitcoin shed more than $18,000 in November, as a record amount of money rushed out of the market, making this its largest dollar loss since May 2021, when a number of cryptocurrencies collapsed.
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Given its relatively short lifespan, there is not much in the way of seasonality to guide traders’ expectations for how bitcoin usually behaves in December.
On average, bitcoin has tended to rise by around 9.7% in December, ranking it third in terms of performance, with October being the strongest month, with an average gain of 16.6%, and with September, the weakest month, with an average loss of 3.5%.
Of more relevance might be bitcoin’s tight correlation with the stock market at the moment, analysts said.
“Bitcoin tends to be a leading indicator for overall risk sentiment right now, and its slide does not bode well for stocks at the start of this month,” XTB research director Kathleen Brooks said in a note.
“There is no obvious driver (on Monday). However, the sharp decline in volatility last week, the VIX fell back below the average for the last 12 months, may have unnerved some investors who remain concerned about an uncertain outlook into year-end,” she said.
CME bitcoin futures also show the growing bearishness.
Bitcoin futures that expire in three months’ time are trading at their smallest premium to those that expire this month in at least a year, reflecting how investors are less willing to bank on a sustained rise in the price over time.
Ether , was down nearly 6% at $2,845, having lost some 22% in value in November, the most since February’s 32% slide.
REUTERS
