Bitcoin (BTC), the world’s leading cryptocurrency, experienced a sharp decline in the early hours of Monday, briefly dropping below the $93,700 level before recovering slightly.
As of press time, BTC is trading around $95,500, reflecting a roughly 20–25% retreat from its all-time high of $126,251 reached just over a month ago.
The pullback has wiped out more than $1.1 trillion in market capitalization from the crypto sector since the peak, pushing Bitcoin back below levels seen at the start of 2025 and erasing the majority of this year’s gains.
Widespread Liquidations and Market Pain
The rapid descent triggered a cascade of forced liquidations across major exchanges.
In the past 24 hours alone, approximately 160,000 traders were liquidated, with total losses exceeding $580 million.
Long-position holders bore the brunt, accounting for around $410 million of the wiped-out margin.
Major altcoins followed suit, though some showed relative resilience on the day: Ethereum (ETH) −1.1%, Solana (SOL) −0.5%, and Dogecoin (DOGE) −1.4%, while XRP managed a modest +0.1% gain.
Key Drivers Behind the Sell-Off
Analysts point to several converging factors fueling the downturn:
1. Institutional and Long-Term Holder Profit-Taking
On-chain data reveals significant distribution from wallets that have held Bitcoin for years.
In the last 30 days, long-term holders offloaded approximately 815,000 BTC—the highest volume since early 2024.
Even older “whale” cohorts (7+ years dormant) have accelerated selling, moving over 1,000 BTC per hour in recent sessions.
2. Reduced Institutional Support
Market observers note fading inflows into spot Bitcoin ETFs and retreating corporate treasury allocations.
The withdrawal of this institutional “dry powder” that helped propel the 2025 rally has left the market more vulnerable to downside pressure.
3. Heightened Correlation with Risk Assets
Bitcoin’s 30-day correlation with the Nasdaq 100 has climbed to ≈0.80, one of the highest readings in years.
As global equity markets react to renewed trade-tension concerns and a more cautious risk environment, cryptocurrencies—often treated as high-beta assets—are leading the decline.
4. Deteriorating Market Sentiment
Sentiment trackers show a surge in negative commentary across social platforms, with crowd psychology shifting firmly bearish.
Many participants who expected a swift march toward $100,000–$150,000 are now recalibrating expectations.
Is the Worst Over, or More Pain Ahead?
Views remain split:
– Bearish analysts argue the current ≈24% drawdown from the cycle high is still modest compared to previous bear phases (which saw 30–40% corrections).
Open interest in put options clustered around $90,000–$95,000 suggests traders are bracing for a potential deeper leg down.
– More optimistic voices highlight structural changes: the maturation brought by spot ETFs, broader mainstream adoption, and a new participant base less tied to the traditional four-year halving cycle.
Some industry veterans suggest the $100,000 zone has long been a psychological profit-taking level for early holders since as far back as 2017.
Looking Ahead
Bitcoin’s performance continues to act as a high-sensitivity barometer for global risk appetite.
Upcoming U.S. economic data, Federal Reserve commentary, and any easing of trade-related uncertainties will likely play a major role in determining whether the market stabilizes here or extends the current correction.
For now, volatility remains elevated, and participants are advised to exercise caution and manage risk appropriately.
Note: This article is for informational purposes only and does not constitute investment advice.
Cryptocurrency markets are highly volatile.
