Bitcoin has had a disappointing year in 2025, disappointing many investors who anticipated a resurgence similar to the market dynamics seen during the Trump administration. As of now, Bitcoin’s performance has lagged behind major asset classes, with a return of only around 5.8% since January, while benchmarks like the Nasdaq and S&P 500 have recorded double-digit gains. Even traditional safe-haven assets like gold have significantly outperformed Bitcoin.
Investor expectations regarding a so-called “Trump trade” have had to contend with unfavorable macroeconomic conditions, a shift towards AI stocks, and sustained profit-taking, all of which have capped Bitcoin’s upside potential throughout the year.
One of the critical issues facing Bitcoin is its struggle to break past the psychological barrier of $100,000. Observers note that this price point has become a significant “take-profit” zone. On-chain data indicates that Bitcoin sees a surge in selling, particularly from long-term holders, whenever it approaches or surpasses this threshold. These long-term investors, referred to as “whales,” are not panicking; they are strategically de-risking and reallocating their capital into high-performing sectors, such as technology and AI. This selling pressure creates a structural barrier, making it increasingly difficult for Bitcoin to maintain new highs.
Additionally, demand appears to be exhausted. Currently, Bitcoin is trading below the short-term holder cost basis of around $106,100, struggling to maintain key support levels around $110,000. Historical patterns suggest that failing to hold this support zone could signal a pullback toward approximately $97,000, posing additional challenges for the cryptocurrency’s recovery.
The situation is compounded by dual pressures from miners and broader macroeconomic factors. Following the recent halving, many Bitcoin miners are experiencing squeezed profit margins, forcing some to liquidate parts of their holdings to cover operational expenses. On the macroeconomic side, a slightly favorable CPI report in September provided some hope. With easing inflation driven primarily by a slowdown in housing costs, the Federal Reserve may have room to cut interest rates in the coming months. While such cuts could support investor sentiment in Q4, their effects have yet to significantly boost Bitcoin’s performance.
Additionally, the growth of derivatives markets has marked a significant structural change this year. Record-high open interest in Bitcoin options signifies market maturation and alters investment behavior; instead of direct selling, investors are increasingly using options to hedge against or speculate on volatility. While this may alleviate some direct sell pressure in the spot market, it also makes for a more volatile trading environment. Recent price movements are thus characterized not only by fundamental shifts but by complex derivative positioning.
Currently, the market appears to be in a late-cycle consolidation phase. Long-term holders are reducing their positions, miners are liquidating, and short-term buyers are experiencing losses. With derivatives shaping price action more than traditional long-term belief, the market is in an accumulation stage that could pave the way for a more robust recovery.
Looking forward, maintaining support in the $97,000 to $100,000 range will be critical. If Bitcoin can hold its ground through anticipated Fed meetings, the outlook for early 2026 could be promising, particularly if forthcoming rate cuts stimulate risk-taking in broader markets. However, falling below this critical floor may lead to a more drastic correction reminiscent of mid-cycle resets experienced in previous years.
In sum, while this year’s underperformance may seem alarming, it is not indicative of a fundamental collapse. Instead, it reflects a natural recalibration of a maturing asset class. As macro conditions become more favorable, Bitcoin’s ability to reclaim its status as a leading high-beta asset will be put to the test.
