Bitcoin Reverses 30% 2025 Gains As Fear Grips Investors And Liquidity Thins

Bitcoin Slides Back To 2024 Levels As Risk Appetite Drains From Global Markets

Bitcoin’s rapid reversal has caught traders off guard.

A little over a month after touching an all-time high, the world’s largest cryptocurrency has now erased the more than 30% surge it built at the start of 2025, slipping back below its end-2024 closing level of US$93,714.

The excitement that once surrounded the Trump administration’s crypto-friendly stance has cooled sharply, leaving the market exposed to a wave of risk aversion sweeping across global assets.

A Record Run Unravels As Macro Anxiety Takes Over

Bitcoin’s slide accelerated on 16 November as it dipped under US$93,714, extending a retreat that began shortly after it hit a record US$126,251 on 6 October.

Four days after the peak, unexpected tariff comments from US President Donald Trump rattled global markets and knocked confidence out of crypto, which had been moving in lockstep with risk assets for much of the year.

Bitwise Asset Management chief investment officer Matthew Hougan, said,

“The general market is risk-off. Crypto was the canary in the coal mine for that, it was the first to flinch.”

For months, institutional demand had helped legitimise Bitcoin’s place in global portfolios.

ETFs collectively brought in more than US$25 billion, lifting their total assets to roughly US$169 billion.

But over the past few weeks, many of those buyers — from ETF allocators to corporate treasuries — have stepped back, drying up the steady inflows that once fuelled Bitcoin’s rally.

ETF Outflows And Rising Fear Hit Market Confidence

Outflows have reached levels not seen since the products launched.

Bitcoin ETFs shed about US$870 million on 13 November alone, the second-largest daily withdrawal to date.

At the same time, the fear and greed index has slipped towards “extreme fear”, mirroring concerns of further sell-offs.

Sentiment has deteriorated sharply among retail investors as well.

Hougan added, noting that traders are wary of enduring another steep downturn,

“The sentiment in crypto retail is pretty negative. They don’t want to live through another 50 per cent pullback. People are front-running that by stepping out of the market.”

Options Traders Brace For Deeper Declines

The options market reflects the anxiety.

Demand for downside protection has surged, with open interest in puts at US$85,000 and US$90,000 overtaking bullish contracts at US$120,000 and US$140,000.

Earlier this year, calls above US$100,000 dominated as Bitcoin repeatedly broke records.

That momentum has now vanished.

According to Deribit by Coinbase, traders are increasingly turning to neutral volatility strategies such as straddles and strangles, signalling expectations of further turbulence.

Liquidity has also thinned, with Kaiko estimating market depth is down roughly 30% from this year’s peak.

A Wider Crypto Pullback Hits Smaller Tokens Hardest

Bitcoin’s downturn has dragged the broader crypto market with it.

The sector has lost more than US$1 trillion in value since liquidations on 10 October, with US$19 billion wiped out in a single day.

Smaller and less liquid tokens have fared far worse.

A MarketVector index tracking the bottom half of the top 100 digital assets is down about 60% in 2025.

Chris Newhouse, director of research at Ergonia, said,

“The markets are always an ebb and flow, and cyclicality in crypto is nothing new.”

Yet among peers, he noted, there is growing “scepticism around capital deployment, and no natural bullish catalysts”.

Macro Pressures And Policy Uncertainty Add To The Sell-Off

A fleeting rebound in US equities earlier in the week faded as questions resurfaced around Federal Reserve policy, with key economic data releases delayed and traders doubting the case for near-term rate cuts.

Max Gokhman, deputy chief investment officer at Franklin Templeton Investment Solutions, said,

“The current sell-off is fully correlated with other risk assets, but the magnitude in crypto is larger given its higher volatility.”

He added that crypto’s sensitivity to macro risks will remain high until institutional participation expands beyond Bitcoin and Ether.

Corporate Heavyweights Face Their Own Strain

The market stress has extended to Strategy, the software firm-turned-Bitcoin accumulator led by Michael Saylor.

Its stock is now trading close to the value of its roughly US$60 billion Bitcoin hoard — a sign investors are no longer willing to pay a premium for its leveraged strategy.

Shares have fallen more than 30% this year, putting the company’s enterprise value, around US$74.8 billion as of 14 November, precariously close to its holdings.

Saylor remained upbeat in a CNBC interview on Friday, saying Strategy is buying “quite a lot” of Bitcoin and will disclose its latest purchases on Monday.

Earlier in the day, he posted “hodl” on X, telling followers not to panic.

Is Bitcoin Running Out Of Support Levels

Technical support is thinning, with traders warning that there is little cushioning between current prices and the low US$90,000 range.

Augustine Fan, partner at SignalPlus, noted that with Bitcoin now negative since Trump’s inauguration and the broader crypto market having “round-tripped year to date”, sentiment is likely to remain subdued for now.

What Comes Next For A Market Running On Fear

Coinlive sees a market caught between fading narratives and a lack of new conviction.

Crypto has long thrived on cycles of belief — sometimes rooted in fundamentals, other times in speculation — but the current retreat highlights how dependent Bitcoin’s rise has become on institutional flows and macro optimism.

As investors hesitate and liquidity thins, the question is not whether Bitcoin can recover, but whether the market can rebuild the confidence needed to support another sustained leg higher.