Bitcoin has recently experienced a significant downturn, plummeting to a low of $100,175, marking the cryptocurrency’s lowest point since May. This latest drop represents a 3% decline in just one afternoon, fueling concerns among investors as the market continues to grapple with the implications of what some are calling “Red October.” Over the past month, Ethereum has not fared much better, suffering a staggering 20% decrease in value and effectively erasing all gains it had made in 2025, currently trading at around $3,300.
Market analyst Alex Krüger identified five primary factors contributing to the ongoing decline: the performance of equities, activities among traders and digital asset treasuries, the recent Federal Open Market Committee meeting, and the fallout from an October 10 market crash that liquidated approximately $20 billion in leveraged positions. “Time,” Krüger noted succinctly, indicating a need for patience amidst the turbulence.
The current climate suggests that now is not a favorable time for risk assets, exacerbated by uncertainties surrounding the U.S. government shutdown and the unresolved trade tensions between the U.S. and China. Investor anxiety regarding future Federal Reserve decisions regarding interest rates is also contributing to sell pressure across the market.
Wall Street executives are warning equity investors of potential pullbacks over the upcoming year, adding to the negative sentiment. The October 10 collapse has left a lasting impact on traders and investors, according to Jasper De Maere, a desk strategist at Wintermute. He mentioned that the incident generated “new narratives” aimed at reviving interest in the market, but these efforts quickly dissipated, resulting in a significant liquidity drain.
The current wave of selling appears to be driven by Bitcoin ETF investors, who recently offloaded nearly $200 million in assets, following an even more staggering total of approximately $800 million in sales just the previous week. Onchain data from Lookonchain highlighted that long-term Bitcoin holders have also been parting with their assets, transferring over $1.5 billion from legacy wallets to major cryptocurrency exchanges such as Coinbase, Binance, and Kraken. Though Bitcoin treasuries have refrained from selling off their holdings, they have also not engaged in new purchases, leading to a concerning stagnation in market support.
As the cryptocurrency community awaits the Federal Reserve’s December meeting, many analysts are revising their predictions for Bitcoin’s price trajectory. Initially optimistic, several prominent institutions had forecast Bitcoin reaching between $180,000 to $250,000 by the end of 2025. Presently, the average prediction across 17 major firms stands at approximately $182,000. However, for Bitcoin to meet even the most conservative estimates, it would need to increase by around 7.5% weekly from its current standing of $101,000.
Despite the gloomy outlook, some market participants remain bullish. Arthur Hayes, a notable crypto commentator, cautioned against mistaking the current weakness for a definitive peak, suggesting that the future might see a shift toward quantitative easing by the U.S. central bank, which could reinvigorate liquidity in the market. As the situation continues to evolve, both investors and analysts remain vigilant, keeping a close watch on regulatory developments and economic indicators that may shape the coming months for cryptocurrencies.
