Bitcoin Erases All 2025 Gains as Crypto Bear Market Deepens

Just over a month ago, Bitcoin was riding high, soaring to a record $126,251. But that exuberance, fueled by the pro-crypto stance of the Trump administration, has vanished. The dominant cryptocurrency has now erased all of the 30% gains it registered since the start of the year, falling below $93,714 on Sunday. This fall pushed the price beneath the crucial closing level from the end of last year, a time when financial markets were rallying on the heels of President Trump's election victory.

The token’s precipitous fall began just four days after its October 6th peak, when unexpected comments on tariffs from the President sent a shockwave of uncertainty through markets worldwide. "The general market is risk-off," observed Matthew Hougan of Bitwise Asset Management. "Crypto was the canary in the coal mine for that, it was the first to flinch."

This new "risk-off" environment has seen the market's biggest champions quietly step back. Over the past month, the large-scale buyers—from the exchange-traded funds to the corporate treasuries—have paused their steady stream of allocations. This flow had been the very support that propelled the token to its records, helping to reframe Bitcoin as a portfolio diversifier, a hedge against inflation and political disarray. But that narrative, always tenuous, is now fraying afresh. The market finds itself exposed not to a dramatic crash, but to something quieter and perhaps more destabilizing: simple disengagement.

Analysts see a perfect storm of factors. Jake Kennis at Nansen described the selloff as "a confluence of profit-taking by LTHs, institutional outflows, macro uncertainty, and leveraged longs getting wiped out." What is clear, he noted, is that the market has "temporarily chosen a downward direction."

One of the starkest examples of this shift comes from Michael Saylor’s Strategy Inc. Once the poster child for corporate crypto-hoarding, the software firm's stock is now flirting with parity to its Bitcoin stash. It’s a clear sign that investors are no longer willing to pay a premium for Saylor’s high-conviction leverage model.

Boom and bust cycles, of course, have been a constant for Bitcoin since its 13,000% surge in 2017 was followed by a 75% plunge the next year. But the current feeling is one of deep caution. "The sentiment in crypto retail is pretty negative," said Hougan, who noted that traders "don’t want to live through another 50% pullback" and are stepping out of the market to front-run that possibility.

The surprise tariff announcement on October 10th, which triggered record liquidations, remains a fresh wound. The damage done to the traders' psyche, said Chris Weston of Pepperstone Group, "is still holding the big players back and it will take time and a consistent push higher for many to forgive and forget."

This downturn has been even more brutal for the smaller, less liquid tokens that traders favor during rallies. An index tracking the bottom half of the largest 100 digital assets is down around 60% this year. While cyclicality in crypto is nothing new, the feeling on the ground has changed. Chris Newhouse of Ergonia summarized the mood, noting that "amongst friends, Telegram chats, and at conferences, the general sentiment I’ve received shows skepticism around capital deployment, and no natural bullish catalysts."