Key takeaways
- Contrary to historical trends, October 2025 was a negative month for bitcoin with a 4% decline.
- Institutional investors remain stable, supporting the price of Bitcoin during the latest volatility.
- Analysts see no clear signs of a long-term pullback.
Bitcoin’s 13% decline over the past month has shaken a market that has spent the better part of the past two years celebrating new cryptocurrency highs, record inflows of exchange-traded funds and a wave of institutional adoption. With ether and solana falling even more sharply than bitcoin, the question dominating investors’ minds is whether this is the start of a prolonged period of decline or simply turmoil in a volatile asset class.
October is historically a great month for the world’s top cryptocurrency: BTC made an average gain of 20% during this month from 2013 to 2024. This is why Bitcoin traders have come to colloquially refer to this month as Until. 2025 was a different story: between October 6 and November 6, bitcoin fell from $124,000 to $101,000, falling twice below the psychological threshold of $100,000 last week. In recent days, it has risen to $106,000.
Analysts cite a wide range of macroeconomic factors and market dynamics as driving the selloff. Tough talk from central bankers and fading hopes for short-term rate cuts have pushed investors out of risky assets such as cryptocurrencies, while renewed geopolitical and trade tensions have further soured sentiment.
But more importantly, when it came to bitcoin’s sharp fall, as prices fell, leveraged traders – who use borrowed money to finance their trades – had to unwind their positions, triggering liquidations that worsened the sell-off. Meanwhile, other long-time investors took profits, accelerating the pullback.
Macro Forces Trigger Bitcoin Selloff
Eliézer Ndinga, head of research at 21Shares, attributes the start of the sell-off to US President Donald Trump’s threat in October to impose a 100% tariff on rare earths from China. Because this comment came just minutes after U.S. markets closed on Friday, October 10, Ndinga says crypto became the only immediately liquid asset that investors could sell to hedge against macro risk. “Cryptocurrencies were the only asset available to be sold to generate liquidity and protect against the market downturn,” he says, adding that “the fundamentals are still strong” and the episode should be considered short-term.
“Approximately $19 billion in liquidations flooded the exchanges in less than 24 hours, triggering a severe liquidity crisis and widespread risk aversion,” according to Dovile Silenskyte, director of digital assets research at WisdomTree. “Since then, the market has digested this shock. »
Matthew Kimmell, CoinShares digital assets analyst, sees a broader set of pressures. He claims that long-time Bitcoin holders are making profits after half a decade or more of volatility and that a “large cascade of liquidations in mid-October” triggered broader risk aversion. Business demand has also slowed, while “macroeconomic uncertainty is likely weighing on overall risk appetite.”
Is this the end of the crypto rally?
It is more complicated to know whether this decline marks the start of what traders call a “crypto winter”. Bitcoin has gone through three major winters: December 2013 to January 2015, December 2017 to December 2018, and November 2021 to November 2022. During these periods, bitcoin fell approximately 75%, 83%, and 73%, respectively.
“In comparison, today’s decline is minor,” says Silenskyte. “Although sentiment has calmed after October’s flash crash, the market structure is much stronger than in previous cycles.”
According to Kimmell of CoinShares: “If the market continues to follow its historical four-year cycle pattern, the current timeline also aligns with where previous bull markets have tended to peak. » But he also highlights what’s different this time: Leverage appears lower than at previous peaks, macroeconomic expectations are leaning toward looser policy, and altcoins haven’t shown the euphoric “explosion” behavior typical of a true cycle top.
21Shares’ Ndinga believes the past model is fading. He claims that 2025 is “the first year in which the usual ‘rise, sharp downturn, long recovery’ pattern has changed,” highlighting the fact that Bitcoin remains above $100,000 with surprisingly moderate volatility nearly two years after the 2024 halving.
Crypto ETF feeds
Institutional players are central to understanding the current market. October was a positive month for crypto ETF inflows, particularly into Bitcoin and Ethereum, but ETFs have seen moderate selling over the past two weeks. Interestingly, Solana has continued to attract consistent inflows every week since April.
“Professional investors seem cautious, but they’re not completely backing off,” says CoinShares’ Kimmell. “If they were, we would see a much greater volume of outflows from crypto ETFs.”
“The sell-off was primarily driven by short-term positioning and derivatives unwinds, rather than fundamental changes in conviction,” says WisdomTree’s Silenskyte. “Long-term cohorts continue to resist volatility; this feels more like a cyclical reset in an ongoing institutional adoption phase than the start of another crypto winter,” he says.
21Shares’ Ndinga goes further, arguing that institutional engagement is increasing, not decreasing. “One of the main reasons that convinces us that these turbulences are temporary is precisely the fact that institutional investors, who hold securities for the long term, have not withdrawn from the market,” he says.
What’s Next for Bitcoin
Whether the market finally enters another “crypto winter” or is simply warming up after an intense year, Ndinga and Kimmell come to a similar conclusion: Bitcoin behaves less like a speculative niche investment and more like a macro asset, sensitive to real returns, liquidity flows and the market’s appetite for risk – in all respects part of the global financial system.
Kimmell, for his part, asserts that “a true crypto winter is typically characterized by continued waves of leverage liquidations, strong FX outflows, large wallet funding activations, declining institutional interest, crypto industry bankruptcies, and a risk-free macroeconomic backdrop.”
Kimmell expects Bitcoin to remain “range-bound with periods of volatility related to macroeconomic data, regulation, and market positioning,” while remaining optimistic about the medium-term outlook as monetary conditions ease and institutional participation deepens. Ndinga considers short-term volatility “healthy” after a long rally and record capital inflows, saying that “as long as BTC maintains above $100,000, the structural upward trend remains intact.”
According to WisdomTree’s Silenskyte, “as liquidity conditions normalize and macro uncertainty subsides, bitcoin could stabilize and retest previous highs. The key variable will be the broader risk environment: improving sentiment and stable institutional flows could pave the way for a recovery through the end of the year.”
