Bitcoin's 2025 Gains Erased: Who Ended the BTC Bull Market?

TradingKey - After slumping below $93,500, 2025 Bitcoin price gains have been completely wiped out. Investors are puzzled as to why its bull market, underpinned by political tailwinds, institutionalization, and its four-year cycle, abruptly halted.

On Sunday, November 16, Eastern Time, Bitcoin's price tumbled below the $94,000 mark, falling to its lowest level since the end of last year. As of Monday, Bitcoin staged a slight rebound above $95,000, yet market panic shows no sign of dissipating.

Bitcoin Price Chart 2025, Source: TradingKey

According to Alternative.me, the Crypto Fear & Greed Index remained in the "extreme fear" zone at 10 points for two consecutive days over the weekend, matching its year-to-date low recorded in February.

Bitcoin's High Beta Nature Amplified

Since late October, the S&P 500, Nasdaq, and cryptocurrency markets have generally weakened. Liquidity concerns in the financial system during the U.S. government shutdown, wavering Federal Reserve interest rate cut prospects, and AI valuation bubbles have prompted investors to embrace a "risk-off mode."

However, compared to the U.S. stock market's choppy performance amidst macroeconomic uncertainty, Bitcoin's persistent sluggishness has surprised industry analysts.

Goldman Sachs observed a distorted asymmetry between Bitcoin and the Nasdaq 100 Index: Bitcoin tends to see smaller gains when the Nasdaq rises, but larger declines when it falls.

Analysis indicates that changes in liquidity structure have exacerbated the asymmetric performance of Bitcoin, a cryptocurrency known for its high beta and narrative-driven premium.

Peaking stablecoin issuance, decelerating ETF inflows, and exchange market depth that has not yet recovered to early last year's levels highlight the increased fragility of crypto market liquidity.

Macro Liquidity: The True Arbitrator of Bitcoin's Trajectory?

Industry insiders suggest that Bitcoin's price pullback lacks a clear trigger. If one "culprit" must be singled out, it is likely the weakening of macro liquidity.

Nansen analysis attributes this round of Bitcoin sell-off to a combination of long-term holder profit-taking, institutional capital outflows, macroeconomic uncertainty, and leveraged long liquidations. Evidently, after an extended period of sideways consolidation, the market has temporarily opted for a downward trajectory.

Jake Kennis, an analyst at Nansen, stated that Bitcoin trades more like a macro asset embedded in institutional portfolios, responding primarily to liquidity, policy, and dollar dynamics, rather than exhibiting predictable supply shocks akin to its four-year halving cycle.

The "Bitcoin halving cycle" has so far seen four rounds in November 2012, July 2016, May 2020, and April 2024. In each instance, Bitcoin's price typically reached new highs more than a year after the halving before entering a bear market correction.

With 18 months having passed since the 2024 halving event, there is an established expectation for a price decline towards the end of the halving cycle, although the demand influx from ETFs is shifting perceptions of the halving's impact.

Crypto market maker Caladan noted that Bitcoin bull markets in 2017 and 2021 were not solely driven by prior halving events but stemmed from a more powerful and fundamental force: global liquidity. With the end of the U.S. government shutdown, this driving force may re-emerge.

MHC Digital Group believes that Treasury yield spreads, the repo market, and other funding indicators are signaling warnings akin to late 2018 to 2019, with high-sensitivity asset Bitcoin already adjusting ahead of traditional markets. This pullback reflects tightening funding conditions and shifting interest rate expectations, rather than a breakdown in cryptocurrency fundamentals.

The firm anticipates that cryptocurrencies will be among the first to rebound once liquidity conditions reverse, similar to every significant intervention over the past decade.

BlackRock cautioned that following the government reopening, investors are raising more questions about the next catalyst for the near-term outlook and market direction, given the uncertainty surrounding how much economic data will be released by the government in the coming weeks.

Bitcoin's Death Cross: A Glimmer of a Price Bottom?

Bitcoin's sustained price decline has seen it drop 25% from its October peak, now forming a "death cross" — a bearish technical signal where the 50-day moving average falls below the 200-day moving average. This marks the fourth such cross since the beginning of the 2023 cycle.

Historically, while typically indicating weakening short-term momentum in a long-term trend, the death cross has paradoxically served as a crucial signal for Bitcoin reaching a temporary bottom in previous instances.

Analysts believe this week will be critical for Bitcoin to achieve a breakout, requiring a significant rebound to maintain cyclical integrity. Should the rebound fail, Bitcoin's price may retest lower levels before resuming its ascent to challenge the 200-day moving average.

Crypto veterans indicate that $100,000 is a pivotal level for many early Bitcoin holders, serving as their benchmark to sell a portion of their holdings. To reach Standard Chartered Bank's proclaimed year-end target of $200,000, Bitcoin would need to more than double from current levels.

The key question now is whether Bitcoin's liquidity narrative and its tendency to rebound after a death cross can re-emerge, especially as its price continued to fall 10% even after the government reopened.