Coinbase analysts point out that macroeconomic signals and market behavior suggest the selling pressure may be easing. With the Federal Reserve ending quantitative tightening and returning to bond purchases, the flow of cash into markets could improve, which typically benefits risk-on assets like crypto.
Yet, despite these positive signs, Bitcoin broke key support levels, sparking volatility that has traders and beginners alike asking what comes next.
Why Bitcoin Fell? What Investors Should Consider?
Several factors contributed to the recent decline. First, Bitcoin broke major bull market support bands, technical levels that often signal continued upward momentum. When these bands fail, they can trigger rapid selling as traders adjust positions. Options markets also show a bearish tilt, with many traders betting on lower prices, creating additional downward pressure.
Longtime investors, often referred to as OG whales, have been offloading portions of their holdings, taking advantage of the recent rally. Large outflows from spot Bitcoin ETFs have also contributed to the sell-off, reducing institutional demand. Additionally, Decentralized Automated Trading Systems, or DATs, have slowed activity, dampening liquidity in key markets. For example, a recent $150 million outflow from a major Bitcoin ETF highlighted how institutional movement can impact price action almost immediately.
Buy the dip?
With quantitative tightening ending, the Fed is back in the bond market and the drain of cash from markets may be behind us. That’s usually good for risk-on assets like crypto.
So why did BTC dump?
• BTC broke major bull market support bands
• Options traders… pic.twitter.com/1C8mxtemun— Coinbase Institutional 🛡️ (@CoinbaseInsto) December 2, 2025
In this environment, Coinbase suggests that traders focus on breakout opportunities rather than trying to catch falling knives. “Knife-catching” refers to buying during a steep decline in hopes of a quick rebound, a strategy that can be risky during high volatility. Breakout trades, in contrast, involve entering positions when the asset demonstrates renewed strength or surpasses resistance levels, offering a higher probability of success.
The recent Bitcoin dip also underscores a broader trend: markets remain sensitive to macroeconomic shifts and institutional behavior. Investors may want to watch Fed actions, ETF flows, and on-chain whale movements before making aggressive moves. For beginners, this period offers a chance to learn about market dynamics and risk management, rather than making impulsive buys based solely on price drops.
More about Coinbase
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— Coinbase 🛡️ (@coinbase) December 1, 2025
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Disclaimer
The information provided by Altcoin Buzz is not financial advice. It is intended solely for educational, entertainment, and informational purposes. Any opinions or strategies shared are those of the writer/reviewers, and their risk tolerance may differ from yours. We are not liable for any losses you may incur from investments related to the information given. Bitcoin and other cryptocurrencies are high-risk assets; therefore, conduct thorough due diligence. Copyright Altcoin Buzz Pte Ltd.
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