Bitcoin's rally has stalled as risk aversion grows. With ETFs slowing and traders stepping back, the market now searches for its next direction.
In the volatile history of the cryptocurrency market, Bitcoin has always played the leading role. In November 2025, the price of Bitcoin fell sharply from a record high of $126,251 to around $94,869. In just over a month, it erased more than 30% of its gains for the year and even briefly dipped below the closing price at the end of last year.
This pullback is not an isolated event. It is the result of several forces working together: macroeconomic shifts, geopolitics, institutional behavior, and market psychology. Based on the latest market data and analysis, this article explains the causes, impact, and possible outlook for this correction, to help investors understand how the market behaves in a “risk-off” environment.
Market Backdrop: A Sharp Reversal from Peak to Downturn
Bitcoin started 2025 in a very strong position. From the beginning of the year, helped by expectations of a global economic recovery and faster institutional adoption, the price of Bitcoin climbed steadily and broke above $120,000, reaching a new all-time high. This move was not only supported by the effects of the most recent Bitcoin halving, but also by optimism around pro-crypto policies after the U.S. election.
However, the good times did not last long. From mid-October, the price of Bitcoin began to fall sharply. The cumulative drop exceeded 25%, and in early November the price briefly fell below the level of last year’s year-end close. While this pullback is not as deep as past bear markets (for example, the drop of more than 70% in 2022), its speed and scale have been enough to alarm the market. The 30% round-trip of this year’s gains reminds many investors that crypto markets move in clear cycles.
According to data from on-chain analytics platform Glassnode, Bitcoin’s market capitalization has fallen from about $2.5 trillion at the peak to around $1.8 trillion now. The total market value of all cryptocurrencies is moving around $3.2 trillion. This backdrop highlights the “double-edged sword” nature of Bitcoin as “digital gold”: it can amplify gains in a bull market, but it can also magnify risks when hit by external shocks.
Core Drivers of the Pullback: Multiple Factors at Work
This Bitcoin pullback is not driven by a single event. It is the result of macro conditions, institutional flows, and internal market mechanics all acting together. Below are three main drivers in detail.
1. Macroeconomic shift into “risk-off” mode
Changes in the global macro environment are the first and most important catalyst for this correction. After the Trump administration took office, its unexpected comments on trade tariffs, including possible increases on major trading partners, quickly triggered market fears.
Investors who had hoped for a “Trump trade” — that is, pro-business policies pushing up asset prices — began to worry about disruptions to global supply chains and rising inflation instead.
This pushed stocks, bonds, and cryptocurrencies into a synchronized “risk-off” mode. The Nasdaq fell about 5% over the same period, while Bitcoin, as a high-risk asset, dropped much more. The Federal Reserve’s policy outlook also played a key role. Even though inflation has eased, uncertainty around the future path of interest rates has increased. Many investors prefer to move into cash or government bonds as safe havens.
History shows that the correlation between Bitcoin and the Nasdaq reached 0.85 in 2025. This means macro shocks pass very quickly into the crypto market. The turn from post-election optimism to a more cautious stance took only a few weeks. It shows how sensitive the crypto market is to external signals.
2. Institutional outflows: from peak inflows to declining participation
Institutional money was the main driver of Bitcoin’s bull run in 2025. In the first half of the year, Bitcoin exchange-traded funds (ETFs) saw more than $25 billion of net inflows. ETF products led by giants like BlackRock and Fidelity became the main engine behind the price rise.
But recent data shows that this trend has reversed. Reports from Arkham Intelligence suggest that institutional investors are reducing their exposure and, in some cases, turning to net outflows. Corporate treasuries, such as MicroStrategy’s Bitcoin holdings, have also slowed their purchases. Part of the reason is pressure on stock prices and ongoing regulatory uncertainty.
At the core, this is about risk management. Many institutions chose to lock in profits after the price peaked, in order to avoid further downside. Long-term crypto buyers, such as pension funds and hedge funds, are also pausing new positions until macro signals become clearer.
As a result, there is no longer a steady “buying flow” supporting the market. Daily trading volume has fallen from a peak of around $100 billion to about $60 billion. This gap in demand makes price swings larger and corrections steeper.
3. Profit-taking and leveraged liquidations: internal amplifiers of the move
High leverage in the crypto market is another major amplifier of this pullback. Long-term holders (LTHs), often defined as addresses holding coins for more than 155 days, started to take profits after prices hit new highs. According to data from IntoTheBlock, selling from LTHs surged by about 20% in late October. This wave of profit-taking added direct downward pressure on the price.
Even more dramatic was the wave of liquidations in leveraged trading. Long positions in futures and options were wiped out after tariff announcements, triggering record single-day liquidation levels of more than $1 billion. Very high leverage (up to 100x on some platforms) caused a chain reaction: small price drops triggered stop-losses and liquidations, which then pushed prices even lower.
Retail traders, especially those trading on platforms like Binance and Coinbase, were hit hard. This reveals a structural issue in the crypto market: high leverage can speed up rallies, but it also makes cascading liquidations far more likely during pullbacks.
Changes in Capital Behavior: Caution from Institutions
More detailed changes in capital flows also confirm how deep this correction runs. Large institutions such as Galaxy Digital and Grayscale have started to reduce positions or pause new buying. The stock price of Michael Saylor’s MicroStrategy has moved close to the value of its Bitcoin holdings.
This suggests that the market is no longer willing to pay a “Bitcoin premium” for the company and that some investors doubt the sustainability of its long-term strategy.
Overall, the market mood has shifted from “FOMO” (fear of missing out) to “FUD” (fear, uncertainty, doubt). With fewer new funds coming in, on-chain activity for Bitcoin has fallen. The growth rate of active addresses has dropped from around 5% per month to about 2%.
This change in behavior is not permanent. It is a rational response to short-term risks. But it does prolong the duration of the current pullback.
Conclusion: Opportunities and Warnings in a Cyclical Correction
The latest drop in Bitcoin is not the result of one single event. It is a cyclical correction driven by institutional outflows, macro risk, weaker sentiment, and excessive leverage all at the same time. The process is painful, but it may also create the base for the next bull market.
Investors should watch key signals such as a return of ETF inflows and clearer macro policy guidance to judge when a real turning point may come. In the long race of the crypto world, patience and risk management remain the most important keys to survival and long-term success.