Bitcoin, the original cryptocurrency, has officially entered a bear market at the start of this month after falling 22% from its October peak near 126,000 dollars.
After having been up as much as 35% since the start of the year, the latest decline has reduced gains to less than 4% as of Friday.
Selling accelerated this week, with Bitcoin dropping to around 94,700 dollars on Friday—its lowest trading level in nearly six months.
A Bitcoin bear market
Pressure on Bitcoin has intensified as long-term holders appear increasingly willing to close positions and lock in profits after massive gains in recent years.
Jerry O’Shea, Head of Global Markets Insights at Hashdex Asset Management, said: “Bitcoin has come under pressure from long-term holders taking profits, along with uncertainty surrounding Federal Reserve policy, liquidity conditions, and other macro factors.”
Bitcoin has failed to mount any meaningful rebound since the sudden October 10 crash triggered when President Donald Trump reignited his trade war with China. According to Peter Chung, head of Presto Research, some buyers and sellers left the market after that episode, reducing order-book depth and making prices more volatile.
Chung wrote in an email: “Bitcoin is under pressure just like other high-risk assets (see AI-stock movements), but the downside has been amplified by a crypto-specific factor—order books have thinned out after the October 10 liquidations, which hurt many market makers.”
The road back — so far
Until a few weeks ago, 2025 had been a relatively strong year for Bitcoin. The token was trading near 69,000 dollars ahead of Trump’s re-election in November, then surged roughly 83% — with volatility — to an all-time high above 126,000 dollars in early October.
Bitcoin crossed 100,000 dollars for the first time in early December 2024 as investors bet that the Trump administration would adopt crypto-friendly regulations.
Trump embraced the crypto sector, eased regulatory scrutiny, and pushed for supportive legislation. Congress passed and Trump signed the “GENIUS Act” in July, marking a new regulatory era for stablecoins.
Trump also appointed crypto-ally Paul Atkins to lead the SEC, while crypto increasingly entered the mainstream with new exchange-traded products offering easier market access.
Bitcoin was trading near 94,000 dollars at the start of the year. It has now erased nearly all of the past 11 months of gains. By comparison, the S&P 500 is up 13.4% this year, and gold prices have surged 53%.
While tech stocks have also come under pressure, investors have been buying dips. Nvidia dropped 3.36% on Friday before closing up 1.77%. On Monday, it fell 3.08% before trimming losses to end down just 1.88%.
Bitcoin, meanwhile, remains stuck around 92,000 dollars with little sign of recovery. Some analysts say the crypto market is at a turning point—positive catalysts have already been fully priced in this year, while uncertainty about the outlook is rising.
“Market behavior over the next few days will determine whether this is a deeper reset or just a sharp, temporary pullback within a still-intact cycle,” said Rafik of OKX.
Some crypto investors remain optimistic. Bitcoin fell to about 74,500 dollars in April before rallying above 126,000 dollars in early October.
Ryan Rasmussen, Head of Research at Bitwise Asset Management, said: “Right now, some investors are spooked by the sideways action. But in our view, it’s a perfect opportunity to accumulate Bitcoin or for those on the sidelines to enter the market.”
Key drivers of the decline:
Tech-sector collapse
Bitcoin has been caught in a broader sell-off in high-risk assets, especially tech stocks, which have suffered sharp declines amid concerns about stretched valuations.
Spot Bitcoin ETFs saw outflows of 866.7 million dollars on Thursday, according to CoinGlass — the largest since early August.
“In some ways, Bitcoin acted as an early risk indicator,” wrote David Nicholas, CEO of XFUNDS, noting recent equity-market valuation concerns. “I think it’s the perfect mix for Bitcoin weakness.”
Antonio G. Giacomo, Senior Market Analyst at XS.com, said in a client note: “The broad decline in tech stocks was a major driver behind the drop in risk appetite.”
Liquidity
Bitcoin liquidity has deteriorated over the past month, which may have contributed to increased price volatility.
Market depth — a measure of how well prices can absorb large trades — fell from around 766 million dollars in early October to 535.2 million dollars this week, according to analytics firm Kaiko.
Rumors around Michael Saylor
Selling intensified Friday after Michael Saylor, founder of Strategy and one of Bitcoin’s most prominent advocates, responded to online rumors alleging that his company had sold part of its Bitcoin holdings.
Arkham Intel estimated that Strategy held about 437,000 Bitcoin on Friday, down from a peak of around 484,000 earlier this month. The company previously said it believes it has identified about 97% of Strategy’s total holdings.
Strategy’s website said it held 641,692 Bitcoin as of Friday. The company did not respond to a Business Insider request for comment.
Strategy is the world’s largest corporate Bitcoin holder, and any sale would be a negative signal for the market, given Saylor’s well-known bullish stance and insistence that the company is a buyer, not a seller.
Another red flag spotted by Bitcoin watchers on social media was the drop in Strategy’s net-asset-value premium, which compares the market value of the company with the value of its Bitcoin holdings. The premium fell below 1x this week, meaning the market assigned no valuation above the worth of its holdings. Strategy’s market cap was about 59 billion dollars Friday, versus 63 billion dollars in Bitcoin.
A separate report from Arkham this week confirmed that Strategy remains the largest publicly traded Bitcoin holder.
But Saylor posted on X that he is actually “₿uying” more Bitcoin, sharing an image of himself with the word “HODL.”
He reiterated this in an interview with CNBC on Friday, saying Strategy is accelerating its purchases and will release its next Bitcoin-buying report on Monday.
Commenting on the recent sell-off, Saylor said: “I think volatility comes with the nature of the sector.”
