Bitcoin News Today: Bitcoin's 30% Plunge Unveils 'Panda Phase'-Soft Bear Market With No Clear Bottom

Bitcoin (BTC-USD) has plunged over 30% from October's record high of $126,000 to around $87,080, marking its steepest two-month drawdown since mid-2022. The decline has been fueled by a confluence of factors: $3.5 billion in ETF outflows in November-the largest since February-the worst leverage liquidations since October 10 ($19 billion in open interest wiped out), and a shrinking stablecoin market capitalization by $4.6 billion since November 1. These dynamics have eroded institutional confidence, with large asset managers pausing accumulation and removing a critical support structure that had stabilized prices through the summer.

The cryptocurrency market now faces a liquidity crunch. Centralized exchange spot volume has dropped below $25 billion, a 40% decline from early October, while stablecoin outflows of $800 million last week underscore a broader flight from on-chain risk as data shows. On-chain data reveals divergent behavior: mid-tier "whales" (wallets holding 100–1,000 BTC) have accumulated 0.47% since November 11, but the largest holders reduced exposure by 1.5% during October, signaling a shift toward strategic positioning. Retail investors, meanwhile, have exited en masse, with addresses holding under 0.1 BTC declining sharply.

Market sentiment has deteriorated to extreme fear levels, as reflected in the Crypto Fear & Greed Index, which plummeted to 15-the lowest since the index's inception-on November 26. This metric, which aggregates volatility, trading volume, social media sentiment, and Bitcoin dominance, indicates widespread panic and uncertainty. Such extreme readings historically precede market rebounds, but current conditions suggest a protracted correction.

The Federal Reserve's policy trajectory adds another layer of uncertainty. Recent comments from officials like San Francisco Fed President Mary Daly have shifted market expectations toward a potential 25-basis-point rate cut in December, though traders interpret this as a "hawkish cut" rather than a dovish pivot. A genuine dovish move could reinvigorate risk appetite, but Bitcoin's correlation with equities-its correlation with the Nasdaq 100 now at 0.72-suggests it remains a high-beta asset rather than a macro hedge.

Derivatives markets hint at cautious optimism. A block trader on Deribit executed a $1.76 billion "call condor" bet targeting a controlled rally to $100K–$112K by December 2025, signaling a measured recovery scenario. However, this trade is an outlier in a market still dominated by deleveraging, with daily liquidations averaging $400–$500 million and ETF redemptions persisting.

The path forward hinges on three variables: the Fed's December decision, stabilization of ETF flows, and Bitcoin's ability to defend $84,000 support. A failure to hold this level risks cascading liquidations toward $75,000, while a successful defense could trigger a rebound toward $94,000–$100,000 if institutional inflows resume. For now, the market remains in a "panda phase"-a soft bear cycle with lower volatility but no clear bottom- according to 21Shares strategist Adrian Fritz.