FameEX Hot Topics | What Really Caused Bitcoin to Once Plunge to $84,000 This Week?

Bitcoin’s once plunge to $84,000 this week was far more complex than a single headline trigger. What began as a failed breakout above $92,000 on Sunday turned into a brutal Monday rout, liquidating $388 million in leveraged long positions and sending the market into damage-control mode. While some immediately blamed Japan’s bond market chaos, the reality points to a perfect storm of stablecoin fears, deteriorating global macro conditions, and fading risk appetite.

Japan’s 20-year government bond yields did hit their highest level in a quarter-century, reflecting rising inflation worries and unsustainable debt trajectories. Yet the narrative that JGB turbulence single-handedly crushed Bitcoin quickly ungraded. The 30-day rolling correlation between Bitcoin and Japanese yields has swung wildly between positive and negative all year, making a clean causal link nearly impossible. The timing was convenient, but the evidence remains circumstantial.

The deeper wounds came from elsewhere. S&P Global Ratings delivered a body blow last Wednesday by downgrading Tether’s reserve quality to the lowest possible tier, citing chronic transparency gaps and unknown counterparty risk. Even though Tether operates outside traditional banking frameworks, the downgrade reignited long-standing stablecoin anxiety and reminded traders how fragile the dollar-pegged ecosystem remains. Simultaneously, a resurgent U.S. dollar and darkening global growth outlook drained liquidity from risk assets, with Bitcoin caught squarely in the crosshairs.

The fallout has upended the corporate Bitcoin treasury playbook. The 23% drop over the past month pushed companies like Strategy (MSTR) below their net asset value for the first time in years, slamming shut the once-lucrative cycle of issuing discounted shares to buy more BTC. Strategy CEO Phong Le made it clear that selling Bitcoin remains an absolute last resort, but the mere discussion signals how dramatically the environment has shifted. With stablecoin confidence cracking, macro headwinds strengthening, and traditional funding avenues closing, Bitcoin’s once slide to $84,000 reflects not just Japanese bond noise, but a broader and more troubling reassessment of crypto risk across the board.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.