Bitcoin experienced a significant decline on Monday, falling below the $90,000 mark and consequently erasing all the gains it had made throughout 2025. The cryptocurrency has seen a 27% decrease from its record high reached in October. At the time of reporting, Bitcoin was trading around $90,123, marking a 3.3% drop in the past 24 hours and an approximately 13% decrease over the last week. Trading volume for Bitcoin surged, more than doubling to $114 billion.
Derivatives Market Impact and Ethereum's Performance
The sharp price movement led to substantial liquidations in the derivatives market. Approximately $335 million worth of Bitcoin derivatives contracts were liquidated within the past day, contributing to total crypto market liquidations of $725 million over a 24-hour period. Meanwhile, Ethereum was trading just above $3,000, reflecting a 2% decrease in the last 24 hours and a 15% drop over the past week.
Analyst Sentiment and Market Cautiousness
Analysts from QCP Capital, a crypto trading firm based in Singapore, observed that Bitcoin breaking below its 50-week moving average and closing under $100,000 for the first time since May 4 has fostered a more cautious sentiment across digital asset markets. The firm also noted that discussions surrounding the potential end of the four-year cycle have contributed to this bearish outlook.
The Four-Year Cycle and Potential Delays
Bitcoin's market dynamics are closely watched in relation to its halving events, which occur approximately every four years. Historically, these events are followed by a significant price drawdown between 12 to 18 months later. Following the halving in April 2024, Bitcoin approached the end of this typical drawdown window in October. Some analysts are now suggesting that the cycle might be experiencing a delay rather than an outright end.
Key Support Levels and Overhead Supply
QCP Capital identified $92,000 as a critical support level, a price point that previously acted as a lower bound late last year and early this year. This region is also significant due to an unfilled CME gap, which could increase the likelihood of a short-term technical bounce if tested. However, the analysts cautioned that dense overhead supply might limit the strength of any rebound, and rising macro uncertainties coupled with sluggish liquidity returning to crypto markets contribute to a fragile overall picture.
CME Gap and U.S. Government Shutdown Impact
The term "CME gap" refers to the discrepancy between Bitcoin's spot price and the closing price of CME Bitcoin derivatives contracts on a Friday afternoon. The recent U.S. government shutdown, which concluded after 43 days and became the longest on record, had an indirect effect on markets. The U.S. Treasury General Account increased to $1 trillion during the shutdown, withdrawing approximately $700 billion from market liquidity.
Prediction Markets and Federal Reserve Outlook
Users on the prediction market Myriad are now assigning a 63% probability that Bitcoin will fall to $85,000 before attempting to climb back to $115,000, a significant jump of 30% in the past day. In parallel, economic indicators are being closely monitored. The New York Federal Reserve's Empire State Manufacturing Survey unexpectedly rose by eight points to 18.7, significantly surpassing analyst forecasts which had anticipated a decline to 6.
Interest Rate Expectations and Crypto Equities
Traders on Polymarket are assigning a 55% probability that the federal funds rate will remain unchanged at the December meeting. This sentiment is echoed by the CME FedWatch Tool, which places the probability of a pause in rate hikes around 60%. In response to the broader market downturn, crypto-related equities experienced a sharp decline. Coinbase, Circle, Gemini, and Galaxy stocks all fell by approximately 7%. Strategy, identified as the largest corporate Bitcoin holder, saw its share price slide 4%, reaching its lowest point since October 2024.
Stabilizing Losses and Potential Local Lows
Analysts at Bitfinex have noted that the pace of realized losses in the Bitcoin market is beginning to stabilize, suggesting that the cryptocurrency might be approaching a local low. Historically, sustainable bottoms have only formed after short-term holders capitulate and incur losses across multiple cycles. The market appears to be nearing this threshold again, with near-term resilience dependent on whether this capitulation phase can effectively exhaust remaining sell-side pressure. This current pullback represents the third-largest since 2023 and the second-largest since the launch of U.S. spot Bitcoin ETFs.