Bitcoin From 90K: The Three Culprits Behind the Meltdown
April 2024. Bitcoin completes its fourth halving. The market is euphoric: supply cut in half + ETF money flood + the election of the “crypto president” Trump. All scripts point to six-figure prices and beyond. On October 6, 2025, Bitcoin did hit an all-time high of $126,251.
Then everything stopped.
From that day, Bitcoin erased all its yearly gains within months, briefly falling below $90,000, closing 2025 with a negative return — while the S&P 500 gained 17% and gold surged 70%. 2025 was supposed to be crypto’s “policy dividend year.” Instead, it became the year faith unraveled.
What exactly happened? Here are the three core culprits.
Price Recap: From Halving Euphoria to Free Fall
Key timeline:
| Date | Event | BTC Price |
|---|---|---|
| 2024/12/31 | Year-end close | $93,714 |
| 2025/04/20 | Fourth halving | ~$95,000 |
| 2025/10/06 | All-time high | $126,251 |
| 2025/10/10 | Largest liquidation event | Dropped >15% |
| 2025/11/16 | Breached yearly open | Lost $93,714 |
| 2025/11/18 | Yearly low | Below $90,000 |
| 2025/12/31 | Year-end close | ~$87,000 |
From peak to year-end, the cumulative decline exceeded 25%, formally entering a technical bear market. More alarming: Bitcoin’s correlation with the S&P 500 surged from 0.23 at the start of the year to over 0.86 by year-end. It was no longer “digital gold” — it had become “leveraged tech stock.”
Culprit #1: Record Selling by Long-Term Holders
Blockchain data doesn’t lie. In 2025, long-term holders — those holding Bitcoin for over 155 days — sold a record 1.6 million BTC. At an average price of approximately 160 billion in sell-side pressure.
Why exit in the most “policy-friendly” year ever?
The answer is simple: six digits is a psychological curse. When Bitcoin quickly broke $100,000 after Trump’s election, many long-term holders who had endured the 2022 bear market faced paper gains of multiples or even tens of multiples. They chose to “cash out.” Bitwise CIO Matt Hougan later remarked: “Nobody can truly resist the temptation to cash out in six-figure territory.”
This selling pressure was not a one-off event — it persisted throughout the year. Every bounce saw another wave of veteran whales reducing positions. The sold BTC flowed into the market, barely absorbed by ETF inflows, creating a year-long tug-of-war — until even the ETFs could no longer hold the line.
Culprit #2: Leverage Liquidations and Macro Headwinds
October 10, 2025. The crypto market experienced the largest liquidation event in history: at least $20 billion in leveraged positions were wiped out in an extremely short time window.
The trigger was Trump suddenly announcing tariff remarks, sparking a broad risk-asset sell-off. But the real problem lay deeper: market leverage had approached 2021 bull-market peak levels. Long positions were overcrowded, and any shock would trigger an avalanche of cascading liquidations.
Simultaneously, the macro environment rapidly deteriorated:
- U.S. job openings hit a six-month high, reinforcing sticky inflation expectations
- The Fed’s rate-cut trajectory narrowed from “multiple cuts this year” to “wait and see”
- Treasury yields rose, tech stocks corrected, risk appetite contracted across the board
- Middle East escalation (Israel-Iran conflict) suppressed all risk assets
Matrixport reported that since the October 2025 peak, BTC and ETH futures open interest corresponding to leverage had cumulatively unwound nearly $30 billion. The market didn’t lack the will to rise — it had simply bled too much to bounce back.
Culprit #3: Narrative Collapse and the Correlation Trap
What is Bitcoin’s most fundamental value proposition? A non-sovereign asset decoupled from the traditional financial system.
The data from 2025 slapped this narrative in the face:
- BTC-S&P 500 correlation surged from 0.23 to 0.86
- BTC fell over 6% for the year; S&P 500 rose 17%, gold surged 70%
- Spot ETFs saw billions in net outflows in Q4
- Some publicly traded companies holding digital assets (DATs) saw share prices fall and were forced to sell BTC for liquidity
When Bitcoin’s price moves almost in lockstep with the Nasdaq, it is no longer a hedge — it’s a high-beta speculative asset. The institutional allocation thesis — “low correlation with other assets” — completely collapsed in 2025.
The deeper question: can Bitcoin sustain its value through network effects and real-world utility alone, without speculative fervor and policy tailwinds? The answer 2025 gave was not optimistic.
Despite recording a negative annual return and breaking the traditional four-year halving cycle expectation, institutional consensus has not disappeared. Standard Chartered, Bernstein, and others still project $200,000+ targets for 2026. As global macro liquidity gradually improves and the regulatory environment becomes clearer, Bitcoin may emerge from this consolidation phase and resume its growth trajectory.
But for retail investors, the lesson of 2025 matters more than any price prediction: no asset rises forever, halving is not magic, and leverage never only helps you make money.
Bitcoin’s long-term value is unquestionable — but only if you survive long enough to see it realized.
This content is for informational purposes only and does not constitute investment advice. Cryptocurrency trading involves extremely high risk. Past performance is not indicative of future results. Please make independent judgments based on your personal risk tolerance.
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