Bitcoin just wiped out all of its 2025 gains. What a crypto winter could look like.
Bitcoin has slipped into “extreme fear territory” after the crypto failed to hold above the psychologically important $100,000 level. – MarketWatch photo illustration/iStockphoto
It’s been just over a month since bitcoin hit an all-time high of $126,272.76 on Oct. 6, but things turned sour for the cryptocurrency soon after. Now, that level seems like a distant memory.
The price of bitcoin BTCUSD fell over 9% in the week ending Nov. 14. As of Monday it was trading below $92,000. The steep decline, which was partially due to large crypto “whales” selling the asset, pushed the crypto below a few key levels.
Last week, bitcoin entered “bear market” territory, marking a decline of 20% or more from a recent peak. Over the weekend, bitcoin saw a “death cross” technical pattern emerge, which happens when an asset’s 50-day moving average crosses below its 200-day moving average. On top of that, bitcoin has officially wiped out all of its 2025 gains.
All of these things indicate negativity surrounding bitcoin. But does that mean a “crypto winter” is upon us?
“I don’t think we’re in a crypto winter. I think we’re watching bitcoin grow up,” Louis LaValle, chief executive of crypto investment firm Frontier Investments, told MarketWatch.
“This doesn’t look like the classic pattern where everybody gives up, prices collapse 70%-80%, volumes die, and interest disappears. What we’re watching in bitcoin right now is a change in how the asset is owned and traded, a market-structure transition, not a cyclical bear market,” he added.
Historically, bitcoin has entered periods of declining prices while not having the backdrop of institutional adoption, said Kevin Kelly, portfolio manager of Amplify ETF’s crypto-linked Amplify Bitcoin 2% Monthly Option Income BITY and Amplify Bitcoin Max Income Covered Call BAGY exchange-traded funds.
But this period of declining prices is “distinguishably different” because bitcoin is a “mature asset class, enhancing institutional adoption and liquidity” as evidenced by reports that J.P. Morgan will be accepting bitcoin as collateral.
Data from CryptoQuant showed that the investors selling bitcoin right now are doing so at net profit, which means any capitulation or margin calls haven’t happened yet. But it also noted that retail investors haven’t been stepping in to buy the dip. Instead, crypto whales have stepped in to buy at lower prices.
“The one-year growth in U.S.-based ETF holdings have slowed down from 441K BTC on Oct. 10, to 271K BTC today, indicating slower demand from U.S. investors,” Julio Moreno, CryptoQuant’s head of research, told MarketWatch. “Retail investors are not buying the dip, as suggested by the average order size in the bitcoin spot market.”
– CryptoQuant
– CryptoQuant
While the on-chain data doesn’t point to anything breaking yet, the weak demand isn’t helping stem the selloff.
Luke Lango, lead technology and cryptocurrency analyst at InvestorPlace, said that the recent death cross is worrisome.
“The big level to watch has always been the 50-week moving average. That’s the make-or-break line. Every time bitcoin broke below its 50-week moving average in the last 13 years during a boom cycle, the party was over, and crypto prices crashed over the next 1-2 years (excluding the COVID flash crash),” he told MarketWatch.
Lango pointed out that bitcoin just moved below its 50-day moving average last week.
Bitcoin is about 27% below its most recent high. The typical bitcoin bear market downturn is about -30.8%, according to Dow Jones Market Data going back to 2014. So this current drop isn’t anything too out of the ordinary. There were two bear-market drops in 2022 where the crypto fell over 45%.
The tightening of global liquidity, driven by central banks reversing easy-money policies over the past couple of years, has been a key contributor to the weakness in bitcoin prices, said Kelly, the portfolio manager for the Amplify ETFs. In the U.S., the Federal Reserve has delayed interest-rate cuts, while the Treasury General Account (TGA) has led to temporary liquidity drains, “making risk assets like bitcoin highly sensitive to these conditions,” he said.
“Overall, this appears to be a confluence of short-term liquidity issues, sustained selling and eroded sentiment rather than a single catalyst,” said Kelly.
Meanwhile, the market has slipped into “extreme fear territory” after bitcoin failed to hold above the psychologically important $100,000 level, said Kelly.
But investors have not lost interest, he said. It’s normal to see a “digestion period” after such a period of high returns of the lows of January 2023, he said.
And historically, “when you see ‘extreme fear territory,’ it has been a good opportunity to put money to work in bitcoin — even for long-term investors to scale into positions by dollar cost-averaging purchases over the next quarter,” said Kelly.
Meanwhile, the big-picture economic environment looks supportive for bitcoin too.
The macro backdrop is “turning structurally more supportive” for bitcoin, and for gold as well, said Frank Holmes, co-founder and executive chairman of HIVE Digital Technologies, which builds and operates data centers for bitcoin mining and AI-related computing. “Government overspending and ongoing money printing create long-term support for both.”
“Even if short-term sentiment softens and new user growth slows, structural trends like rising debt levels, monetary expansion and geopolitical fragmentation continue to favor scarce, decentralized assets,” said Holmes.
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