Why Bitcoin Dropped Despite Bullish Institutional Signal

Crypto News Today: What Triggered the Market Selloff?

The crypto market saw a sharp pullback today, with Bitcoin falling below $90,000 and Ethereum following lower. The move came with over $140 million in liquidations within a single hour, pointing to a leverage-driven selloff rather than a breakdown in fundamentals.

The main driver behind today’s crypto weakness was renewed concern over global monetary tightening — particularly from Japan.

1- Bank of Japan Rate Hike Fears Spark Risk-Off Move

Markets are pricing in a potential Bank of Japan rate hike on December 19, with expectations for additional tightening in 2026. Japan remains one of the last major sources of ultra-loose liquidity, and any shift toward tightening has historically pressured risk assets, including crypto.

As a result, traders moved early to reduce exposure, triggering cascading liquidations across the market.

2- Stablecoin Adoption Accelerates Despite Market Drop

While prices were falling, a major institutional development quietly reinforced crypto’s long-term trajectory.

Interactive Brokers announced it will allow brokerage accounts to be funded using stablecoins such as USDC and USDT. This marks a significant step in integrating crypto infrastructure directly into traditional financial systems and signals growing acceptance of stablecoins as cash equivalents.

3- Fed Signals Hint at a Softer Policy Path

Comments from US Federal Reserve officials added an important counterbalance to today’s selloff.

Chicago Fed President Austan Goolsbee indicated that more rate cuts may be needed in 2026 than current projections suggest. Meanwhile, former Treasury Secretary Hank Paulson noted that much of the inflation pressure expected in 2025 is driven by tariffs rather than demand — a factor interest rates cannot easily address.

These signals weaken the case for prolonged monetary tightening.

4- Gold Rallies as Crypto Consolidates

Gold surged above $4,350, reflecting short-term risk aversion. Historically, periods where gold leads often precede a delayed recovery in Bitcoin once liquidity conditions stabilise.