Bitcoin erased all its gains for 2025 on Tuesday after the world’s largest cryptocurrency plunged below the psychologically important $90,000 mark for the first time since February. The token was trading near $89,900 in afternoon deals, extending a nearly 30 percent fall from its October peak of $126,000.
The sharp pullback has unsettled global crypto markets and revived a familiar debate: Is this a healthy correction in an overextended rally, or the early stages of a prolonged downturn?
A mix of macroeconomic, technical and market-specific pressures has driven Bitcoin’s steep correction.
1. Weak macro signals: Expectations of a December US Federal Reserve rate cut have faded, with odds slipping below 50 percent. The Fed’s hawkish tone, along with the liquidity squeeze following the 43-day government shutdown, has weakened risk appetite.
2. ETF outflows gather pace: Spot Bitcoin ETFs in the US, which had powered much of the year’s rally, are witnessing heavy redemptions. More than $2.5 billion has exited these vehicles so far this month, including around $900 million from BlackRock funds, as institutions trim exposure after a strong year.
3. Fresh Mt. Gox jitters: Transfers of over 10,600 BTC—worth about $950 million—by the defunct exchange have sparked fears of large creditor sales. Analysts warn that accelerated selling could drag prices closer to Bitcoin’s realised price of $56,000.
4. Technical breakdown: A failure to hold the $92,000 level triggered a wave of forced liquidations, with more than $1 billion in leveraged positions wiped out within a day. The breach of $90,000 deepened retail panic.
Market opinion is split. Optimists insist Bitcoin’s long-term fundamentals remain intact and view the fall as a rare entry point. Some high-profile figures argue that sub-$90,000 levels may not last.
However, others urge patience. Technical indicators remain weak, especially after a “death cross” formation in which the 50-day moving average slipped below the 200-day average—traditionally a bearish signal. Analysts warn that a failure to hold support near $88,000 could lead to further declines.
For long-term investors, a gradual, staggered accumulation strategy may be the more prudent approach, while traders are being advised to brace for elevated volatility.
Despite the gloom, several commentators remain cautiously optimistic for 2025. Expectations of renewed global liquidity, including increased US Treasury spending, could stabilise sentiment in the coming months.
Still, near-term risks persist. Analysts say Bitcoin must reclaim $93,000 quickly to avoid drifting towards the $86,000–$88,000 band. Short-term forecasts suggest a potential trading range of $90,000 to $1,10,000 if broader markets stabilise, while Ethereum is expected to consolidate between $3,000 and $3,600.
Some long-term projections remain upbeat, with targets of $1,50,000–$2,00,000 by late 2025 still circulating among bullish market watchers—though these depend heavily on institutional flows and post-halving dynamics.
For now, crypto markets remain in a clear risk-off mode, and investors are being advised to stay cautious as the next few weeks could determine whether Bitcoin’s latest slide is a temporary stumble or a deeper shake-out.