- Bitcoin is heading into Christmas down more than 30% from its all-time high.
- Analysts list four reasons why the leading crypto is bruised.
Bitcoin missed the St. Nick’s sleigh this year.
Instead of a festive Santa gathering, the leading crypto trudges into Christmas down 30% from its all-time high in October despite macroeconomic tailwinds.
While a “Goldilocks” mix of a global cycle of falling rates and increasing liquidity has generated strong returns for stocks and gold, Bitcoin has disappointed investors, analysts David Brickell and Chris Mills of the London Crypto Club said in their weekly newsletter.
“Despite all the positive idiosyncratic factors for Bitcoin, with progress from a supportive US administration strengthening the institutional adoption story, and despite record highs above $126,000 in early October, Bitcoin, as of this writing, is down about 5% year-to-date against the US dollar and about 40% against gold,” the pair said.
Here are four reasons why the price of Bitcoin has declined during the latter part of 2025, according to Brickell and Mills.
A persistent “mechanical” supply
Bitcoin’s underperformance in recent months is due to steady, price-insensitive selling, Brickell and Mills said.
“We saw substantial selling from long-term OG holders who, after holding several cycles, began distributing aggressively around the psychologically important $100,000 level,” they said.
This strategic sale weighs on the price of Bitcoin despite otherwise favorable fundamentals.
Four-year cycle trap
The self-reinforcing belief in Bitcoin’s four-year cycle also works against prices as traders seek to get ahead of each other, Brickell and Mills said.
Approximately every four years, Bitcoin undergoes an event called a halving. The event halves the rewards paid to miners for creating new blocks.
This reduces the supply of new Bitcoins entering the market and increases pressure on Bitcoin miners.
In previous cycles, prices tended to rise sharply in the months following a halving, then peak, then fall as enthusiasm faded and early investors took profits.
Because this pattern has repeated itself many times, many traders now expect it to happen again and they act on this belief by selling.
Certainly, a growing number of voices argue that the four-year cycle narrative should be relegated to the dustbin of history.
Analysts at Grayscale and Bitwise as well as Binance co-founder Changpeng Zhao are just some of the people who say institutional adoption, regulatory clarity and the maturity of the crypto industry mean the factors that led to previous halving cycles are significantly weaker.
However, it is clear that not all traders are ready to abandon their four-year cycle strategies just yet.
AI Bubble Fears
The artificial intelligence business, once driving the broader market, began to falter in the second half of 2025.
As skepticism grew over valuations and monetization timelines, momentum investors pulled out of risky assets, analysts said.
Under normal conditions, Bitcoin behaves like a sensitive liquidity risk asset. When the appetite for risk faded, so did cryptocurrency. This dynamic mattered more than any single crypto catalyst.
Red October
The sharp $19 billion liquidation that occurred in October dealt a major blow, Brickell and Mills said.
Although the price of Bitcoin quickly recovered on the surface, deeper damage persisted.
Liquidity providers and market makers who absorbed the forced sales appear to have gradually reduced their exposure thereafter, creating a persistent surplus through the end of the year, both sides said.
outlook 2026
Despite the decline, Brickell and Mills remain optimistic about the price of Bitcoin in the long term.
“The debt-driven, fiat currency-based system requires ever more debt and deficits to survive, which requires ever-expanding central bank balance sheets to finance these deficits and provide liquidity to the market via money printing,” they said.
“Literally, there’s no stopping this train.”
Crypto market players
- Bitcoin is down 0.7% over the past 24 hours, trading at $86,775.
- Ethereum is down 1.3% in the last 24 hours, at $2,920.
What we read
Lance Datskoluo is DL News’ European markets correspondent. Do you have any advice? Email to lance@dlnews.com.
