Why Crypto Is Falling Today — And Why Raoul Pal Says This Dip Matters

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Global crypto markets fell today, with Bitcoin and altcoins trading lower. Bitcoin slipped below $88,000 after briefly moving above $90,000 earlier in the day. Ethereum also dropped back under $3,000, while most large-cap altcoins traded in the red.

One of the drivers of the decline is the upcoming expiry of more than $28.5 billion worth of Bitcoin and Ethereum options on Deribit later this week. This is the largest options expiry in the exchange’s history and represents over half of its total open interest.

Such large expiries often increase short-term volatility as traders adjust or roll positions. Additionally, the $96,000 level is Bitcoin’s “maximum pain” point, where options sellers benefit most, while heavy put interest around $85,000 could pull prices lower if selling pressure increases.

Adding to the pressure, U.S. spot Bitcoin ETFs recorded net outflows of about $142 million on December 22.

Broader market indicators also point to stress. The Crypto Fear and Greed Index fell to 29, firmly in the “fear” zone. Altcoin dominance momentum, measured by monthly RSI, has dropped to an all-time low, showing weak appetite for riskier tokens.

Raoul Pal says dip zone is forming

Despite the pullback, Raoul Pal, founder of Real Vision, said he believes the market is entering a buying zone rather than a new downtrend.

Pal said crypto was hit hard as liquidity was temporarily withdrawn from the system, exposing excessive leverage. However, he said that prices are now stabilizing around prior lows, a pattern that often means a base forming.

Looking ahead, Pal expects a surge in global liquidity once year-end funding pressures ease and policy conditions loosen, arguing that investors do not need to catch the exact bottom to benefit from the next move higher.

“Crypto reacts first when liquidity tightens, and it recovers first when liquidity returns,” he said, adding that the current weakness fits that pattern.