Bitcoin is witnessing a dramatic reversal that has left investors questioning the sustainability of this cycle’s bull run. After reaching an all-time high above $126,000 in October, the world’s largest digital asset plummeted below $90,000, completely wiping out all gains accumulated throughout 2025. However, as markets opened on Tuesday, November 18, Bitcoin showed signs of resilience, ticking upward and offering a glimmer of hope to beleaguered investors who have watched billions in market value evaporate over the past six weeks.
The sharp decline in Bitcoin price represents more than just a technical correction—it signals a fundamental shift in market sentiment and raises critical questions about the future trajectory of digital assets. With approximately $1.2 trillion wiped from the total cryptocurrency market capitalisation, the current downturn has forced both retail and institutional investors to reassess their positions amid mounting macroeconomic pressures and shifting risk appetites across global financial markets.
Bitcoin’s Dramatic Price Collapse
The magnitude of Bitcoin’s recent price movement has shocked even seasoned cryptocurrency traders. The flagship digital currency dropped below $93,000 for the first time in nearly seven months, with the lowest point reaching approximately $89,420 before stabilising. This represents a staggering decline of nearly 30% from the October peak, marking one of the most significant corrections in the current market cycle.
The velocity of this cryptocurrency crash has been particularly concerning. Trading volume for Bitcoin more than doubled, jumping to $114 billion, while about $335 million worth of Bitcoin derivatives contracts were liquidated within a single 24-hour period. These liquidations cascaded across the broader crypto ecosystem, pushing total market liquidations to $725 million and triggering panic among leveraged traders who had bet on continued upward momentum.
What makes this downturn particularly noteworthy is its timing and character. Unlike previous corrections that occurred during periods of regulatory uncertainty or technological failures, the current decline is unfolding against a backdrop of what many considered favourable conditions for digital assets. The Trump administration’s pro-crypto stance, the approval of Bitcoin ETFs, and growing institutional adoption were all supposed to provide a floor for prices. Instead, the market has demonstrated that even positive fundamentals cannot overcome broader macroeconomic headwinds.
Key Factors Driving the Bitcoin Selloff
Macroeconomic Pressures and Federal Reserve Policy
The primary catalyst behind Bitcoin’s decline stems from shifting expectations regarding Federal Reserve monetary policy. Uncertainty around Federal Reserve policy and the prospect that interest rates may not be cut next month has weighed heavily on risk assets, including Bitcoin. When interest rates remain elevated, traditional safe-haven assets like Treasury bonds become more attractive, drawing capital away from speculative investments like cryptocurrencies.
Stronger-than-expected economic data has further complicated the picture for crypto investors. Recent manufacturing surveys and employment figures have reduced the likelihood of near-term rate cuts, with prediction markets now assigning a 55% probability that rates will remain unchanged at the December Federal Reserve meeting. This hawkish pivot has caused investors to rotate out of growth-oriented and speculative assets, creating downward pressure on Bitcoin market valuations.
Thinning Liquidity and Market Structure Issues
Following the flash crash on October 10, when President Donald Trump reignited his trade war with China, many buyers and sellers have left the market, resulting in fewer orders for Bitcoin and leaving the price more susceptible to volatility. This thinning of order books has created a dangerous feedback loop where price movements become more exaggerated, triggering additional stop-losses and forced liquidations.
The liquidity crisis has been exacerbated by the behaviour of market makers—the specialised trading firms that traditionally provide depth to cryptocurrency order books. Some analysts attribute the extended selloff to over-leveraged investors unwinding their positions rather than a fundamental collapse in crypto markets. However, the practical effect has been the same: reduced market depth and increased price volatility.
Technical Breakdown and Death Cross Formation
Technical analysts have pointed to several concerning chart patterns that suggest further downside risk. The formation of a “death cross”—when the 50-day moving average crosses below the 200-day moving average—has historically signaled extended periods of bearish sentiment. The break below the 50-week moving average and a weekly close under $100,000 for the first time since May have cemented a more cautious tone across digital asset markets.
Additionally, Bitcoin has broken through multiple critical support levels that had previously held firm during earlier corrections. The $92,000 level, which served as a reliable floor late last year and early in 2025, was decisively breached. This technical deterioration has forced even bullish traders to acknowledge that the market structure has fundamentally weakened, with many now looking toward the $85,000 to $88,000 range as the next potential area of support.
The Recovery: Signs of Stabilisation Emerge
Despite the severity of the selloff, Bitcoin has demonstrated some resilience in recent trading sessions. After plunging below $90,000 overnight, Bitcoin regained the $93,000 level in U.S. morning action, suggesting that significant buying interest exists at these depressed levels. This rebound, while modest, has provided some relief to investors who feared a continued spiral downward.
The cryptocurrency’s ability to stabilise and tick upward comes amid several potentially positive developments. Institutional interest, despite short-term volatility, appears to remain intact. Harvard University reportedly tripled its Bitcoin ETF holdings to $443 million through BlackRock’s spot Bitcoin ETF, signalling that sophisticated investors view current prices as attractive entry points for long-term positions.
Furthermore, analysts noted that the $92,000 region coincides with an unfilled CME gap, increasing the odds of a short-term technical bounce if tested. CME gaps—differences between Friday’s closing price. Bitcoin futures and the actual spot price have historically. Been filled as the market seeks to reconcile these discrepancies. Potentially providing a catalyst for near-term price appreciation.
Institutional Perspective: Long-Term Holders Accumulate
While retail investors have been shaken out of positions, data suggests that sophisticated market participants are taking advantage of the weakness. Blockchain analytics firm Glassnode reported a sharp increase in wallets holding more than 1,000 Bitcoin, indicating that wealthy investors and institutions are accumulating during the downturn. This pattern has historically marked significant market bottoms in previous cryptocurrency cycles.
David Namdar, chief of CEA Industries, stated that what we are seeing is not a collapse in crypto markets but rather the extended aftershock of October’s liquidation event, with the fundamentals remaining unchanged. This perspective suggests that the current selloff is primarily a technical and sentiment-driven phenomenon rather than a reflection of deteriorating fundamental value propositions for Bitcoin and other digital assets.
The behaviour of long-term holders provides additional insight into market dynamics. CryptoQuant CEO Ki Young Ju pointed to Bitcoin’s rising realised cap—a metric that tracks the average purchase price of all coins—as evidence of continued demand. When the realised cap increases during price declines, it indicates that new capital is entering the market at lower prices, potentially setting the stage for a future recovery.
The Four-Year Cycle Debate: Has the Top Already Occurred?
One of the most contentious debates in the cryptocurrency community centres on Bitcoin’s four-year halving cycle and whether the October peak represents the cycle top. Analysts at QCP Capital noted that in a space where narrative often drives price, talk of the four-year cycle nearing its end has only added to the prevailing bearish sentiment.
Historically, Bitcoin has experienced major bull markets in the 12 to 18 months following each halving event, which occurs approximately every four years. The most recent halving took place in April 2024, and by October 2025, the market appeared to be nearing the end of that typical window. However, some analysts argue that this cycle has been delayed rather than concluded, pointing to unique factors such as the introduction of spot Bitcoin ETFs and unprecedented institutional adoption.
The cycle theory, while not empirically proven, has provided a useful framework for understanding cryptocurrency market behaviour. Previous cycles saw parabolic price increases followed by corrections of 70% to 80%. If the October peak does represent the cycle top, investors should prepare for potentially extended consolidation or further downside. Conversely, if the cycle has merely been delayed, the ultimate peak could still lie ahead, though possibly on a more extended timeline than previous cycles.
Broader Cryptocurrency Market Impact
Bitcoin’s weakness has reverberated throughout the entire crypto market, with alternative cryptocurrencies experiencing even steeper declines. Ethereum, the second-largest cryptocurrency by market capitalisation, has fallen nearly 40% from its August peak above $4,955. Other major tokens, including Solana, XRP, and BNB, have similarly suffered significant losses, underscoring how Bitcoin’s price action tends to set the tone for the broader digital asset ecosystem.
The correlation between Bitcoin and traditional risk assets has also become more pronounced during this period. Bitcoin’s pullback is part of a broader shift in risk sentiment, with the cryptocurrency under pressure in line with other risk assets such as AI stocks. This increased correlation challenges one of Bitcoin’s key value propositions—that it serves as an effective portfolio diversifier. When Bitcoin moves in lockstep with technology stocks and other growth-oriented investments, its utility as an alternative asset diminishes.
Market Sentiment: From Euphoria to Extreme Fear
Sentiment indicators have swung dramatically from the optimism that characterised the October highs. CNN’s Fear and Greed Index has plummeted to “extreme fear” levels, reaching its lowest point since early April. The rapid shift in sentiment reflects not just the magnitude of the price decline but also the speed at which it occurred, leaving little time for investors to adjust their positions or mental frameworks.
The steep drop in this risk-sensitive asset demonstrates that investor appetite for risk is drying up across financial markets. This risk-off environment extends beyond cryptocurrencies, affecting equity markets, particularly technology and growth stocks. The tech-heavy Nasdaq index has declined approximately 6.5% from its late October high, shedding roughly $2.5 trillion in market value—a reminder that the current downturn is not isolated to digital assets.
Expert Predictions: What Comes Next for Bitcoin?
Analyst opinions on Bitcoin’s near-term trajectory remain divided. On the bearish side, prediction market users now assign a 63% probability that Bitcoin will decline to $85,000 before it can rally back to $115,000. This sentiment reflects concerns about deteriorating technical structure and the possibility that forced selling from leveraged positions has not yet run its course.
Conversely, some prominent voices in the cryptocurrency space have called the current levels an opportunity. Cameron Winklevoss, co-founder of the Gemini cryptocurrency exchange, suggested that Bitcoin’s move near $90,000 could represent one of the last major buying opportunities before a sustained recovery. This bullish perspective is predicated on the belief that Bitcoin’s long-term fundamentals remain sound despite short-term price volatility.
Bitfinex analysts have noted that realised losses from short-term holders are beginning to stabilise, which has historically marked local price bottoms. They emphasised that sustainable market bottoms typically form only after short-term holders—those who purchased recently at higher prices—have capitulated and sold their positions at a loss. The current data suggests that this capitulation phase may be nearing completion, potentially setting the stage for stabilisation and eventual recovery.
Implications for Corporate Bitcoin Holdings
The price decline has significant implications for the growing number of publicly traded companies that have added Bitcoin to their treasury reserves. Standard Chartered estimates that a sustained drop below $90,000 could leave half of these companies’ Bitcoin holdings “underwater,” meaning the assets would be worth less than what was paid for them. Listed companies collectively hold approximately 4% of all circulating Bitcoin, making their potential reactions to continued price weakness a significant factor in market dynamics.
Corporate Bitcoin holders face a dilemma in the current environment. Selling at a loss to preserve capital runs counter to the long-term strategic rationale that motivated these investments initially. However, accounting requirements and shareholder pressure may force some companies to reassess their positions if the downturn continues. The behaviour of corporate holders in the coming weeks could either provide crucial support at current levels or add to selling pressure if treasurers decide to cut losses.
Historical Context: Comparing Current Correction to Previous Cycles
While the current 30% decline from recent highs is substantial, it remains relatively modest compared to corrections seen in previous Bitcoin cycles. During the 2017-2018 cycle, Bitcoin fell more than 80% from its peak before eventually recovering. The 2021-2022 bear market saw similar magnitude declines, with Bitcoin dropping from nearly $69,000 to below $16,000.
What distinguishes the current situation is the speed of the reversal and the context in which it’s occurring. Previous major corrections happened against backdrops of clear negative catalysts—regulatory crackdowns, exchange failures, or the bursting of obvious speculative bubbles. The current decline is occurring despite generally favourable regulatory conditions and growing mainstream adoption, suggesting that macroeconomic factors may be overriding crypto-specific dynamics.
Additionally, the presence of regulated Bitcoin ETFs and increased institutional participation may alter how this cycle unfolds compared to previous ones. Some analysts argue that institutional involvement could dampen extreme volatility and prevent the 80% drawdowns that characterised earlier bear markets. Others contend that institutional money can exit just as quickly as it entered, potentially accelerating declines if risk management protocols trigger systematic selling.
Conclusion
Bitcoin’s erasure of all 2025 gains represents a sobering moment for the cryptocurrency market and a reminder that digital assets remain highly volatile investments subject to both market-specific and broader macroeconomic forces. The decline from above $126,000 to below $90,000 in just six weeks has tested investor conviction and raised fundamental questions about the sustainability of the current cycle.
However, the modest recovery that began as U.S. markets opened on Tuesday suggests that significant buying interest exists at these levels. Whether this represents a temporary bounce or the beginning. of a sustained recovery remains to be seen. and will likely depend on several factors: the trajectory of Federal Reserve policy, the stability of traditional financial markets, and the ability of the cryptocurrency. market to restore confidence among participants. who have been shaken by recent volatility.
For long-term believers in Bitcoin’s value proposition as a decentralised store of value and hedge against monetary debasement, the current environment may represent an opportunity rather than a crisis. For traders and those with shorter time horizons, caution remains warranted as technical indicators suggest the potential for further downside if key support levels fail to hold. As always in cryptocurrency markets, the coming weeks will likely be characterised by elevated volatility and the potential for dramatic moves in either direction.
The ultimate trajectory of Bitcoin and the broader cryptocurrency market will depend on whether buyers can defend current support levels and rebuild the confidence necessary for sustained upward momentum. With institutional interest reportedly increasing at depressed prices and technical indicators suggesting potential capitulation by short-term holders, the ingredients for a market bottom may be coalescing. However, until clearer signs of stabilisation emerge and macroeconomic headwinds subside, investors would be wise to approach the market with appropriate caution and risk management.
FAQs
Q: Why did Bitcoin erase all its 2025 gains?
Bitcoin erased its 2025 gains due to a combination of factors, including uncertainty around Federal Reserve interest rate policy, thinning market liquidity following October’s flash crash, technical breakdowns below key support levels, and a broader risk-off sentiment affecting all growth-oriented assets.
Q: Is Bitcoin in a bear market now?
Bitcoin has entered what many analysts consider bear market territory, typically defined as a decline of 20% or more from recent peaks. The 30% drop from October highs technically qualifies as a bear market. However, whether this represents a sustained bear market.
Q: What price levels should Bitcoin investors watch?
Key support levels to monitor include the $88,000-$90,000 range, where Bitcoin has recently stabilized, followed by $83,000-$85,000, where significant volume clusters exist according to technical analysis. On the upside, Bitcoin needs to reclaim and hold above $96,000-$98,000.
Q: How does this Bitcoin crash compare to previous cycles?
While significant, the current 30% decline is relatively modest compared to previous declines. Bitcoin bear markets that saw 70-80% corrections. What distinguishes the current situation is the speed of the reversal and that it’s occurring despite favourable regulatory conditions and institutional adoption.
Q: Should investors buy Bitcoin at current prices?
This decision depends entirely on individual risk tolerance, investment timeframe, and portfolio circumstances. Some prominent investors view current prices as attractive entry points for long-term positions, evidenced by institutions like Harvard University increasing their Bitcoin ETF holdings.
