Bitcoin (BTC-USD) tumbled more than 7% on Monday, along with crypto-related stocks, casting doubt on a year-end rally despite growing prospects of a Federal Reserve interest rate cut.
The world’s largest cryptocurrency fell from around $91,000 on Friday to $84,000 on Monday, over concerns that Japan could raise interest rates. This sparked fears that investors who had borrowed cheap Japanese yen to buy assets like US stocks and bitcoin might rush to reverse those trades and sell cryptocurrencies and equities.
The last time this unwind happened in August 2024, bitcoin plunged 18% in a few dats, noted Nic Puckrin, investment analyst and co-founder of The Coin Bureau.
“Now that history is repeating itself, it’s wise to prepare for more volatility,” said Puckrin, highlighting that the sharp drop last year was followed by a recovery and new highs.
Still, bitcoin exchange-traded funds (ETFs) posted their second-worst month, with $3.5 billion in outflows. The token is now down more than 30% from its October all-time high above $126,000, and it recently failed to break past the $92,000 level.
“While conditions can shift quickly, a sustained rally still appears unlikely in the near term, especially before year-end. But 2026 may present a very different setup,” said a 10X Research client note on Monday.
Bernstein analysts noted they are “still looking for clear signs for bitcoin to bottom out.”
The token’s “price action suggests weak market sentiment, which has impacted digital asset equities,” wrote analyst Gautam Chhugani in a note on Monday morning.
Crypto related stocks like Strategy (MSTR) sank 10%, while trading platformCoinbase (COIN) dropped by 5%, and Robinhood (HOOD) slid 4%.