In recent developments, Bitcoin experienced a significant drop, falling to $63,822 on Tuesday, which marks a 6.4% decline for the week. This downturn brings the cryptocurrency roughly 50% below its all-time high of $126,080 achieved five months prior. Analysts suggest that this selloff is not indicative of a structural breakdown in Bitcoin’s cycle, but rather a result of compounding macroeconomic shocks impacting a market already burdened with substantial leverage.
The ongoing decline tests the integrity of Bitcoin’s established four-year cycle amid shifting macro conditions. Experts are attributing the price drop not to failures in fundamental principles but to external economic pressures, including trade policies, interest rates, and excessive leverage. Rachael Lucas, a crypto analyst at BTC Markets, described the situation as a culmination of various macro shocks, starting with former President Trump’s decision to implement a 15% increase in global tariffs, which has led to heightened risk aversion across various asset classes. She noted that despite Bitcoin’s “digital gold” narrative, it continues to behave like a risk asset, leading to decreased capital inflows during times of macroeconomic fear.
The pressures have been exacerbated by the Federal Reserve’s recent inaction concerning interest rates, with current predictions indicating a 96% likelihood of no cuts being implemented. Prolonged inflation concerns have contributed to a higher-for-longer interest rate environment, further pressuring risk assets, including cryptocurrencies. The situation has worsened with investment products in the digital asset space reporting outflows for the fifth consecutive week, translating to a total of $4 billion in losses.
Nick Ruck from LVRG Research supported the view that Bitcoin’s price decrease reflects macroeconomic pressures rather than a fundamental breakdown. He noted the negative flow of exchange-traded funds (ETFs) for five weeks straight and the lowest trading volumes since July 2025 as significant indicators of market sentiment. The ongoing pessimism regarding rate cuts, concerns over a potential U.S. government shutdown, and escalating tariffs have all contributed to this bearish outlook. This environment may also force cryptocurrency miners to liquidate their assets, as the operational costs of mining can approach the value of their rewards.
Lucas further emphasized that while the conversation around Bitcoin’s cyclical nature has quieted, the historical trend appears to be intact. She posits that 2025 could be viewed as the peak year, with 2026 as a period of correction before the market moves toward accumulation in 2027 and 2028. Despite the substantial drawdown from the cycle peak, she argues that Bitcoin is simply following its historical patterns.
Looking ahead, analysts maintain a cautious yet hopeful outlook. Ruck anticipates stabilization in the mid-$60,000 range followed by gradual recovery, citing historical trends where Bitcoin often bounces back from corrections. D’Anethan acknowledged that while the realized price of $55,000 is within reach, dipping below $60,000 may not significantly alter investment strategies, potentially presenting a better opportunity for averaging into the market.
Overall, the Bitcoin landscape remains tumultuous yet resilient, as analysts watch closely to determine how macroeconomic conditions will continue to shape its trajectory.
