Bitcoin Tumbles Back Below $90,000 as Crypto Traders Feel ‘Extreme Fear’

Bitcoin fell below the key level of $90,000 over the weekend. (GIUSEPPE CACACE/AFP via Getty Images)

Key Points

• Bitcoin’s price fell 5% to $86,500, dropping below the $90,000 support level it had reclaimed last week.
• The Crypto Fear and Greed Index registered 20 out of 100, indicating “Extreme Fear” among investors.
• Historically, Bitcoin has risen in December only 54% of the time since 2014, suggesting uncertain performance.

Bitcoin and other cryptocurrencies tumbled into Monday trading, slipping below key levels over the weekend as sentiment for digital assets eroded.

Technical indicators for Bitcoin are negative—and history says performance in the month ahead is only a coin flip.

The price of Bitcoin fell 5% over the past 24 hours to $86,500. The largest digital asset had reclaimed the key $90,000 level last week but fell through that support level again on Sunday.

“Bitcoin shows weak development in a falling trend channel in the short term. This signals increasing pessimism among investors and indicates further decline,” according to technical analysis of price trends released by Investtech. “The currency has support at points $84,000.”

The Crypto Fear and Greed Index, which is a composite measurement of crypto investor sentiment, was also flashing red, with the index at 20 out of 100, indicating “Extreme Fear.”

Cryptos had been at the leading edge of a deterioration, and then recovery, in wider risk sentiment in recent weeks, falling through November but bouncing back into the last week of the month.

An important macroeconomic factor for crypto traders, like investors in the stock market, has been the question of whether the Federal Reserve will cut interest rates in December—easing lending conditions and boosting liquidity.

The tumble back in Bitcoin to start the week could be a bearish signal for risk sentiment more broadly. History also suggests that December is not the best month for Bitcoin, with precedents pointing to a coin flip for performance in the month ahead.

Bitcoin has only risen in the period between Black Friday and the end of the year in 54% of cases since 2014, according to Dow Jones Market Data. Since Bitcoin was trading above $91,000 to close out last week, the flagship crypto is off to a poor start.

Beyond Bitcoin, Ether , the second-largest crypto by market cap, lost 6% to $2,850. Smaller cryptos were also in decline, with XRP retreating 6%, Solana slipping 7%, and so-called memecoin Dogecoin down 8%.

Write to Jack Denton at jack.denton@barrons.com