Bitcoin News Today: Why Bitcoin's Volatility Exposes Crypto's Structural Fault Lines

Bitcoin traded near $87,000 on December 2, 2025, rebounding modestly after a sharp selloff that pushed the cryptocurrency below $84,000 earlier in the day. The price action marked a temporary reprieve for the world's largest digital asset, which had extended its drawdown to over 33% from its October peak of $126,198. Analysts attributed the volatility to a confluence of factors, including thin liquidity, elevated leverage, and concerns around Digital Asset Treasury (DAT) structures, alongside broader macroeconomic pressures like a stronger U.S. dollar and rising global yields. According to analysts, the market remained on edge, with Bitcoin hovering near an eight-month low and trading volumes at $74.35 billion, according to CoinMarketCap.

The selloff intensified in early November, with Bitcoin dropping to $81,050 on November 21, triggering over $2 billion in liquidations across 391,000 traders. This marked one of the most severe corrections since the FTX collapse in 2022, as reflected by the Crypto Fear & Greed Index hitting an extreme fear level of 11. The downturn was exacerbated by institutional rebalancing and profit-taking, compounding the impact of structural weaknesses in liquidity and leverage. Mohit Kumar of Delta Exchange noted that the breakdown of the $100,000 psychological level in November amplified the decline, particularly amid U.S. government shutdowns that worsened domestic liquidity conditions.

The impact on crypto-linked equities was equally pronounced. Strategy, the corporate entity with the largest bitcoin holdings, sharply revised its 2025 earnings forecast, projecting a range of either a $5.5 billion loss or a $6.3 billion profit. The adjustment followed its year-end Bitcoin price assumption being cut to $85,000–$110,000 from an earlier $150,000 target. Strategy's stock, which had plummeted 53% alongside Bitcoin's decline, now faces heightened scrutiny as its CEO, Phong Le, signaled a potential sale of bitcoin holdings if its multiple to net asset value (mNAV) dips below 1. This scenario, though described as a "last resort," underscores the fragility of the crypto ecosystem amid prolonged bearish sentiment.

Market participants are closely watching key support levels for Bitcoin. According to technical analysts, a failure to hold above $88,000 could push prices toward $76,800 or even $71,250. Meanwhile, the total cryptocurrency market cap stood at $2.94 trillion, down 0.35% in 24 hours, with Ethereum sliding 0.89% to $2,804.09. The bears dominated the market, with 76% of coins losing value, though some altcoins like Fartcoin (+19.82%) and Pump.fun (+6.54%) bucked the trend.

Looking ahead, the crypto market's trajectory will depend on both macroeconomic developments and corporate actions. Strategy's recent $1.44 billion dollar reserve announcement aims to stabilize its dividend payments and debt obligations, reflecting a defensive posture as it navigates the downturn. Le, however, remains bullish on Bitcoin's long-term potential, arguing that its nonsovereign, limited-supply attributes could outperform traditional assets over a four- to five-year horizon. For now, the market remains in a holding pattern, with investors bracing for further volatility as liquidity conditions and leverage levels continue to test the resilience of the crypto ecosystem.