In recent days, we have seen a massive dump in the crypto market with Bitcoin falling below $97000. This is a challenging period for the crypto markets as we millions in liquidations for leveraged positions. Many people have dubbed the final quarter of 2025 as a crypto winter. However, let's not forget that this downturn is not a sudden event. It seems like the flash crash that caused the biggest liquidation event in the history of crypto, in October was one of the highlights and signs that things were going to turn South. This event was not the main factor either, I would rather say that it was a symptom of a rotten core that was being touted as unbreakable. Let’s dive in!
Key drivers of the fortune downturn in crypto
Institutions
One of the key drivers of the downturn in the crypto markets is institutions. Many people have seen the entrance of large institutions into the crypto space as a good sign, but all I have seen is doom. When institutions came to crypto, they invested into large market cap digital currencies such as Bitcoin and Ethereum. They convinced the public that they were buying digital currencies to hold for a long term! But I have always been skeptical as I believed that they were going to sell at the first sign of trouble.
Unfortunately, the horror I didn’t want to see has come to be. Long term holders of Bitcoin and institutions like BlackRock have been massively selling off. These whales seem to be aware of something that everyone else does not know. They are selling their holdings in Bitcoin like never seen before. The most worrying thing is the timing of these sell offs. Recently, just in the last few days we have seen many whales selling thousands of Bitcoin. This has created a massive sell pressure to the downside due the sheer volume of the coins sold. In addition to this, miners also sell some of their holdings to cover operating costs, and this also adds to the sell pressure.
Now, we all know that according to the low of supply and demand, when supply is higher than demand prices go down. This also happens with Bitcoin, especially when everyone is trying to sell, this is the reason why the price of Bitcoin today is hovering around $96000. This has turned out to be a nightmare for many crypto traders as their accounts disappeared.
Bitcoin ETF outflows
Outflows from Bitcoin ETFs are also one of the main reasons Bitcoin prices are dumping. Millions of dollars have been withdrawn from these investment vehicles. And, as a result, the resilience that was brought by Bitcoin ETF cash inflows, has now become a nightmare. This is because when investors redeem ETF shares, fund managers must sell the underlying Bitcoin to meet these redemptions. This further contributes to the sell pressure on the crypto assets.
In short, this redemption of Bitcoin ETFs en masse may signal the shifting sentiment of retail and institutional investors against such assets. We will have to wait and see if this is the beginning of the end of ETFs in crypto.
Market sentiment and liquidity
It is important to note that massive selloffs and outflows in the crypto markets have a negative effect on the overall market sentiment. This usually leads to fear, uncertainty and doubt among investors. And the result is more investors selling and price tanking further down.
As of today, the greed fear index is showing a serious fear factor which is not a good thing for the market. When there is a negative sentiment against a market, the investors become hesitant to buy, while more of those who hold decide to sell their holdings. And all these can only push prices down.
In terms of liquidity, when there are more sellers than buyers, liquidity will tighten. And all this makes it harder for larger orders to be fulfilled without a significant impact on price. This increases volatility and can make prices fall further to match the available liquidity from buyers.
What to look out for
Institutions like JPMorgan think that the fall in Bitcoin price is a necessary correction before the big rally. Their analysts believe that Bitcoin must touch price around $94000 before shooting up to $145000 before the year ends. I have also seen other analysts who believe that the nearest strong support is at $92000. Personally, I believe we can go down up to about $85000, before moving up. The wildest prediction thought is by Andre Tate who said Bitcoin might go as low as $26000. And the real truth is that no one really knows where Bitcoin price is going, this may be the death of Bitcoin and many altcoins, or the correction needed for the pump.
Also, if prices of Bitcoin keep falling to a point where mining becomes more unprofitable, this may lead to miner capitulation. This means that less efficient miners may shut doors and it may reduce the selling pressure from miners helping in stabilising prices. It is also important to follow the behaviours of the remaining long term-holders. If they keep accumulating more or holding firm, it's probably good. But if they are unloading, it might be time to run faster.
Actionable insights and long-term look
I would like us all to remember that if you are holding spot positions, you will not lose anything if you hold, as long as the price recovers, you will be fine. You will only lose if you sell at a lower price than when you acquired the assets. Another risky endeavour is that of putting all your capital and assets in crypto. No one can ever be this foolish to be honest, if you do this it means if things keep going South, you will become destitute!
Dollar cost averaging with spot seems to be the best option as it balances out purchase costs. If you are someone who fears losses or who wants to protect their capital, you better start using stop loss orders or you will lose everything.
And finally, it is good that you maintain a long term outlook with crypto. Crashes have happened before and the recovery was also miraculous. Those who sold in panic regretted their stupid decisions, after all you only lose when you buy high and sell low. In crypto there are always cycles of boom and bust and the winners have always been holders. So, real crypto OGs have learnt to hold as they believe that the dump comes before the pump.
Final thoughts and Conclusion
The current market conditions are challenging, there is no doubt about that. But this may also be an opportunity for you to buy low, however, this opportunity may also be a risky decision. While the path ahead is uncertain if you understand the driving forces of market movements, you can make sound strategic decisions and come out a winner.
My Affiliate links
For crypto trading I use Okx and Kucoin:
https://www.kucoin.com/r/rf/QBSY1VX3
For forex trading I use justmarkets and FBS
https://fbs.partners?ibl=1028825&ibp=33282156
https://one.justmarkets.link/a/97t6p07ht2
For synthetics trading 24/7 markets I use deriv and Weltrade
https://track.gowt.me/visit/?bta=52354&brand=weltrade
References
MarketWatch – “Bitcoin’s bear-market rout deepens as prices hit a 6-month low. Why long-term holders stepping up selling could be a bad sign. https://www.marketwatch.com/story/bitcoin-sinks-to-a-6-month-low-deepening-its-bear-market-rout-as-long-term-holders-step-up-selling-9d122a90
Investopedia – “Bitcoin’s Price Hasn’t Been This Close to \$100,000 in Months” https://www.investopedia.com/bitcoin-s-price-hasn-t-been-this-close-to-usd100-000-in-months-11843005
Cointelegraph – “BlackRock’s Bitcoin ETF ends 31-day inflow streak with biggest outflow ever” https://cointelegraph.com/news/blackrock-bitcoin-etf-inflow-streak-ends-outflow-btc
Investor’s Business Daily – “Bitcoin Price Hits 5-Month Low; Hut 8 Leads Miner Sell Off” https://www.investors.com/news/bitcoin-price-hits-5-month-low-hut-8-leads-miner-sell-off/
World Economic Forum – “Cryptocurrency prices: What is a ‘crypto winter’?” https://www.weforum.org/agenda/2022/06/cryptocurrency-crash-crypto-winter/
