3 Macro Factors Driving The Bitcoin Drawdown From $120,000 To $90,000

Author: Khyathi Dalal | December 12, 2025 09:57am

Bitcoin's (CRYPTO: BTC) months-long range-bound trading, and a 12% pullback that's keeping it from reclaiming $100,000, has traders digging into what's driving the weakness.

What Happened: Pseudonymous macro researcher Capital Flows elaborated in a detailed X thread that three key macro forces are behind Bitcoin's drawdown:

• Bitcoin is acting as a risk-asset release valve: BTC remains highly sensitive to shifts in risk appetite. While it typically tracks equities, it has recently diverged because it responds more quickly to changes in macro liquidity and the broader risk curve.
• Real interest rates now dominate price action: despite Fed rate cuts, what truly matters is net liquidity. Inverted 2-year real rates are moving almost tick-for-tick with Bitcoin, showing that rising real rates are creating downward pressure.
• Positioning and hedging pressures are driving short-term moves: implied volatility in BlackRock's IBIT ETF is cooling even as BTC consolidates. Meanwhile, Bitcoin proxy equities are lagging, signalling investors are not yet ready to add risk. Capital Flows says a sustained rally requires BTC-linked equities to start outperforming again.

Also Read: Bitcoin At $92,000 Ethereum, XRP, Dogecoin Continue Recovery

Why It Matters: Capital Flows argues traders should ignore short-term noise, Bitcoin's price already reflects liquidity shifts, rate dynamics, and positioning pressures.

Widely-followed swing trader Jesse Olson added that BTC continues to struggle at its descending trendline, which remains firm resistance.

Price has slipped back below key trend-support markers, and if the daily candle closes here, it could confirm another move lower.

This #Bitcoin downward trendline continues to act as resistance.

Price is currently below the trending dots again; a candle close below could signal another leg down. https://t.co/2cARYuUawf pic.twitter.com/W8BMmyypZv

— Jesse Olson (@JesseOlson) December 11, 2025

Olson also noted that while many altcoins flashed bullish divergence, Bitcoin and Ethereum did not, weakening the case for an immediate reversal.

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Image: Shutterstock

Posted In: $BTC