The cryptocurrency market is going through one of the most complex phases of 2025. After a triumphant rally that had led Bitcoin to touch 126 thousand dollars (equal to approximately 110 thousand euros) at the beginning of October, the main crypto currency abruptly reversed course, slipping below the psychological threshold of 90 thousand dollars (approximately 73 thousand euros) and erasing over a trillion dollars from the overall capitalization of the sector in just six weeks.
This collapse, which has eroded around a third of its value, brings the price back to April levels, effectively erasing all the year’s gains and forcing investors to question the causes and future prospects.
The dimensions of the collapse
According to data aggregated by CoinGecko, around 18,000 cryptocurrencies have collectively lost 25% of their value since their October highs, with a market capitalization evaporating of around $1.1 trillion. Bitcoin, while often considered a more resilient asset, was not spared, itself losing over a quarter of its value.
The brief drop below $90,000 represents the lowest level in the last six months, a move that pushed BTC into negative territory on an annual basis. Those who invested at the October highs today find themselves with a loss of 28-30%, while those who entered at the beginning of the year see the substantial profits accumulated in the first quarter vanish.
Why Bitcoin has dropped so much
To the crucial question of what triggered such a violent correction, the market does not find a single answer, it is rather a concert of causes that intertwine technical and macroeconomic factors.
One above all is the radical change in expectations on the Federal Reserve’s monetary policy. Much of the powerful bull run of 2024 and 2025 was in fact underpinned by the prospect of sharp and sustained interest rate cuts. Lower rates, in fact, make traditional safe investments less attractive and reduce the opportunity cost of holding non-interest-bearing assets such as Bitcoin.
But the Fed’s reticence to cut rates has sharply dampened these hopes. In an environment that is preparing to live with high rates, investors have therefore begun to abandon risky assets, a category in which Bitcoin fully falls.
Also complicating the picture is a reversal in spot Bitcoin ETFs, which were previously in high demand and have now seen a record outflow of $870 million in a single day in mid-November.
Is a crypto winter or buying opportunity coming?
In this scenario, the fear of a new “crypto winter” is gaining ground, a prolonged period of depressed prices, poor liquidity and mistrust, similar to those experienced in the past. However, there is no shortage of optimistic voices. Some large institutional investors see this weakness as an opportunity to accumulate positions at discounted prices compared to recent highs.
The investment bank Citi, for example, maintains that the decline is more linked to temporary liquidity tensions than to a deterioration in fundamentals, and maintains a 12-month target price of 181 thousand dollars, believing that liquidity conditions are destined to improve.
