Bitcoin experienced a significant decline, falling below $90,000 for the first time since April, closing the day at approximately $89,368. This drop wipes out all the cryptocurrency’s gains since the beginning of the year, officially pushing it into bear market territory. The cryptocurrency had enjoyed a year-to-date upswing of as much as 35%, but the recent downturn has turned this figure negative, now showing a 2% decrease for 2025.
The decline comes on the heels of a record high of over $126,000 just a month ago, fueled by a combination of expectations surrounding President Donald Trump’s pro-crypto policies and a post-Liberation Day rally. However, investor sentiment has shifted towards caution as they reassess their positions in light of rising concerns regarding the Federal Reserve’s monetary policy. Analysts note that the uncertainty surrounding the Fed’s potential rate cuts—especially given a government shutdown limiting economic data releases—adds to the bearish outlook for Bitcoin and similar risk assets.
Ethereum, the second-largest cryptocurrency, also suffered, dipping below $3,000 for the first time in five months, and is down 8% year-to-date. Meanwhile, bitcoin exchange-traded funds (ETFs) have seen substantial outflows, with an estimated $1.8 billion being withdrawn since mid-November, indicating a broader shift among investors seeking to secure profits amidst the market fluctuations.
In technical analysis, Bitcoin has breached its 50-week moving average, a trend that some market experts interpret as a bearish signal. Should Bitcoin close below the crucial support level of $93,200 for a sustained period, it could pave the way for further declines, potentially reaching its 200-week moving average.
The current trading environment has experts such as Alex Kuptsikevich from FxPro warning of ongoing volatility and downside risks, emphasizing that the overall sentiment in the crypto market mirrors the extreme levels seen during prior sell-offs. As investors navigate this uncertain landscape, Bitcoin’s fate appears tied to macroeconomic trends and developments in the traditional financial markets.