American Bitcoin (ABTC) Plunges 41.87% Amid Crypto Market Turmoil: What's Driving the Selloff?

Summary
• ABTC trades at $2.08, down 41.87% from its $3.58 previous close
• Intraday range spans $1.74 to $2.72, reflecting extreme volatility
• Bitcoin’s $84K level and sector-wide crypto sell-off dominate headlines

Shares of American Bitcoin Corp (ABTC) have imploded on Tuesday, tumbling 41.87% to $2.08 as crypto-linked equities face relentless pressure. The stock’s 52-week high of $14.65 now feels like a distant memory, with Bitcoin’s sharp correction to $84K amplifying fears of a broader market repricing. Traders are scrambling to parse whether this is a buying opportunity or a deeper bearish shift in the crypto ecosystem.

Bitcoin's Sharp Decline Drives ABTC's Volatile Slide
ABTC’s collapse mirrors Bitcoin’s 40% drop from its October peak, as the stock’s business model is inextricably tied to BTC’s price. The company’s Q3 earnings report—showing a $3.47M net profit and 4,004 BTC holdings—failed to anchor investor sentiment. Instead, renewed regulatory scrutiny, profit-taking in tech stocks, and Bitcoin’s technical breakdown below key support levels triggered a sector-wide selloff. With ABTC’s dynamic PE at -15.48 and RSI at 19.25 (oversold), the stock is now trading at a 75.6% discount to its 52-week high.

Blockchain Sector Under Pressure as Bitcoin Dips Below $90K
The blockchain sector is broadly underperforming, with ABTC’s 41.87% drop outpacing even peers like RIOT Platforms (RIOT), which is up 1.8%. Bitcoin’s retreat to $84K has triggered a cascading effect, with crypto treasury firms like Marathon Digital and Hut 8 also facing valuation repricing. ABTC’s 2,443 BTC holdings, worth ~$273M at its peak, now trade at a 70% discount, amplifying downside risks for equity holders.

Options Playbook: High-Leverage Puts and Calls for ABTC's Volatile Outlook
• RSI: 19.25 (oversold)
• MACD: -0.4026 (bearish), Signal Line: -0.3571
• Bollinger Bands: $3.90–$5.34 (current price at lower band)
• 30D MA: $4.83 (price below)

ABTC’s technicals suggest a short-term oversold condition, but structural risks remain. Key levels to watch: $2.00 (psychological support) and $2.72 (intraday high). The stock’s 43.79% turnover rate and 43.79% turnover rate indicate active trading but lack directional clarity.

Top Options Picks:
1. ABTC20251219P2 (Put):
• Strike: $2.00, Expiry: 12/19/2025
• IV: 260.24% (extreme volatility)
• Delta: -0.3397 (moderate sensitivity)
• Theta: -0.0100 (moderate time decay)
• Gamma: 0.2956 (high sensitivity to price swings)
• Turnover: $4,637
• LVR: 5.36%
• Payoff (5% downside): $0.09 per share
This put offers asymmetric upside in a bearish scenario, with high gamma amplifying gains if ABTC breaks below $2.00.

2. ABTC20260102C2 (Call):
• Strike: $2.00, Expiry: 1/2/2026
• IV: 152.45% (moderate volatility)
• Delta: 0.6511 (high sensitivity)
• Theta: -0.0068 (slow time decay)
• Gamma: 0.3822 (moderate sensitivity)
• Turnover: $16,150
• LVR: 4.77%
• Payoff (5% downside): $0.00 (out of the money)
This call is a speculative bet on a rebound, with high delta capturing upside if ABTC rallies above $2.00.

Action Insight: Aggressive bears should prioritize ABTC20251219P2 for short-term gains, while bulls may wait for a bounce above $2.72 before initiating longs.

Backtest American Bitcoin Stock Performance
It appears that the symbol “ABTC” isn’t returning any historical data through our data-feed, so I wasn’t able to retrieve prices for the back-test.Could you please clarify:1. The exact asset or exchange‐listed ticker you’d like to analyse (e.g., BTC-USD on Coinbase, XBTUSD perpetual futures, etc.)?2. How you’d like the “-42 % intraday plunge” to be defined: • A single day whose low is at least 42 % below that same day’s high? • Or a 42 % fall from the previous close to the current day’s low / close? (We can accommodate whichever definition you prefer.)3. Any particular holding-period rules once the plunge occurs (e.g., buy on the close of the plunge day and hold for N days, use stop-loss/take-profit, etc.), or should we simply evaluate average performance over various look-ahead windows (1, 3, 5, 10, 20 trading days)?Once I have these details I can fetch the correct data, construct the event dates when a −42 % plunge occurred, and run the event-driven back-test for you.

ABTC at Critical Juncture: Watch for $2.00 Support and Sector Catalysts
ABTC’s 41.87% drop has brought it to a psychological crossroads. While RSI suggests oversold conditions, Bitcoin’s trajectory and regulatory developments will dictate the stock’s near-term fate. Traders should monitor the $2.00 level for support and the $2.72 intraday high for a potential reversal. Meanwhile, sector leader RIOT’s 1.8% gain highlights divergent performance within the blockchain space. Act now: Short-side options like ABTC20251219P2 offer high leverage if the $2.00 level breaks, while longs should wait for a confirmed bounce above $2.72.