Bitcoin declines over 5.5% this week. Why the cryptocurrency is witnessing fall in price

The bitcoin price stood at $87,098.96 on December 19 (9:56 a.m. IST), up 0.30 percent in a day and a decline of 5.52 percent in a week. In the morning session, the world’s largest cryptocurrency fell as low as $84,460 but quickly recovered to peak just above $87,288.

“Bitcoin is now in an extreme oversold zone, with momentum indicators at levels that have historically marked market exhaustion. Holding the $84,000 support remains key to maintaining a bullish recovery outlook,” said Akshat Siddhant, Lead Quant Analyst, Mudrex.

According to Riya Sehgal, Research Analyst, Delta Exchange, “A sustained move above $89,300 is needed for a trend reversal. Market sentiment is slightly positive but range-bound. Altcoins are tracking Bitcoin’s consolidation, with limited capital rotation across majors. Overall, Bitcoin’s price action around the $89,000–$90,000 level will determine short-term direction for the broader market.”

The volatility has been observed across other cryptocurrency tokens as well, with ETH up 3.02 percent, ADA up 1.86 percent, SOL up 1.26 percent, XRP up 1.40 percent, while Tether is down 0.04 percent in the past 24 hours.

“Although the market volatility has dropped to the average, Audiera and Zcash lead the top gainers with over a 4.2% jump each, followed by Midnight and Bitcoin Cash by over 3% each. Besides, MYX Finance plunges by 13.38%, followed by Pump.fun, Celestia, and Memecore by over 6% each,” said the CoinDCX research team.

Check out the cryptocurrency prices on December 19, as of 9:56 a.m (IST).

Why is Bitcoin down?

“Despite a softer-than-expected US inflation print, Bitcoin sold off as the CPI-driven rally ran into heavy leverage and crowded short-term positioning. BTC initially moved higher, pushing toward the $89K area, but failed to hold those levels.

“Once upside momentum stalled, stop-losses and liquidations kicked in, leading to aggressive selling. In the near term, volatility may stay elevated, and prices could remain range-bound as leverage clears. Investors should avoid chasing breakouts, keep leverage low, and wait for the price to stabilize before adding positions,” said CoinSwitch Markets Desk.

What’s happening in the crypto market?

“Currently, BTC and ETH volumes reflect hesitant participation, with neither macro nor trade headlines prompting breakout demand. The market is waiting for a clearer direction, either coordinated easing to fuel a breakout, or tighter conditions that extend consolidation,” said Nischal Shetty, Founder, WazirX.

Here’s a rundown by Nischal Shetty on what’s happening in the crypto market—

• China launched a major $113 billion free-trade experiment on Hainan Island. While this move may not be a direct crypto catalyst, it does matter for sentiment.
• ECB Holds Rates at 2 percent, signaling confidence in the current fiat framework and keeping liquidity conditions tight. For crypto, this acts as a short-term headwind: without fresh global liquidity, Bitcoin struggles to break higher and instead trades sideways below key resistance levels.
• In contrast, the Bank of England’s rate cut is a modest liquidity positive. It supports the idea that parts of the developed world are moving toward easier policy, which is structurally bullish for risk assets like crypto. However, the impact is diluted by policy divergence rather than synchronized easing.
• Ukraine’s successful debt restructuring reduces geopolitical and credit risk at the margin.