Author
Hongji Feng
Author
Hongji Feng
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Market anxiety is driving price action. Bitcoin is trading around $85,000 after a sharp single-session drop of nearly 6%, extending a decline from the October peak of around $125,000.
The Crypto Fear and Greed Index is currently near 20, following a trough around 10, which still indicates extreme fear. That backdrop links directly to central-bank signs, thinner liquidity, and continued long liquidations.
Bitcoin Under Policy Pressure
The Bank of Japan has been preparing markets for a shift away from ultra-easy settings, with Governor Kazuo Ueda indicating that a policy change meeting is scheduled for December, contingent on wage data. Traders have read that guidance as a potential end to the negative-rate era, which tightened financial conditions into the weekend and helped set off the slide.
On the U.S. side, Federal Reserve officials have leaned cautious on additional easing. Boston Fed President Susan Collins said she would be “hesitant to ease policy further,” describing a “relatively high bar” for further moves without clearer labor-market deterioration.
The remarks of the Federal Reserve and the talk of a policy shift in Japan have pushed yields higher and firmed the dollar; the combination raises funding costs, softens futures basis toward neutral, and reduces tolerance for leverage that had supported rallies during stronger tapes.
Outflows from some spot vehicles on risk-off sessions compound that pressure because they drain cash that would otherwise stabilize closes.
What Would Ease The Strain
Crypto markets shed billions as the global market enters December 2025. More than $637 million in long positions were liquidated during the slide, and the Altcoin Season Index fell to 25, pointing to weak breadth beyond Bitcoin.
Altcoin Season Index (Source: CoinMarketCap)
A credible turn would show up together rather than in fragments. Order-book depth on the largest BTC and ETH pairs would rebuild into and after the United States session, while spreads would stay contained during moderate selling, and funding would stabilize without leaning on short squeezes that exhaust by the close.
Spot product creations would need to improve alongside a rise in net stablecoin issuance, since that pairing signs fresh cash coming in rather than transient covering. When those flows persist for several sessions, rebounds tend to settle more cleanly at the end of the day.
Central bank remarks that push yields higher or firm the dollar can keep bids soft, and relief rallies risk fading when depth thins and exchange-traded flow does not offset de-risking. The tone across majors still follows Bitcoin, and Bitcoin remains one policy headline away from another test of support.
https://cryptonews.com/news/federal-reserve-and-bank-of-japan-signals-hit-crypto-market-losses-deepen/
