Bitcoin keeps losing ground as every minor rise in price draws quick selling from investors who bought close to its October peak.
The largest cryptocurrency slipped 3.6% to $89,502 on Friday during New York hours and has now fallen almost 30% since hitting a record high of $126,000 on October 6.
Even with the Federal Reserve’s rate cut Federal Reserve’s rate cut on Wednesday, the move failed to inject any real life into digital assets, with traders calling it one of the weakest rebounds this year.
Crypto analytics firm Glassnode said several of its indicators now show what it calls a “mild bearish phase.”
The firm said modest inflows of new money are being outpaced by steady selling from large holders who’ve lost confidence in the short-term direction of the market.
According to Glassnode, Bitcoin’s price is now stuck in a “weak but bounded range,” and that time itself is working against holders as unrealized losses pile up.
Those losses climbed to 4.4%, the highest level in almost two years after sitting below 2% for most of that period. The firm said this shift marks a clear move away from euphoria and toward “stress and uncertainty.”
Selling pressure deepens as liquidity thins
Market analyst Alex Kuptsikevich from FxPro said cryptocurrencies “have already entered a bear market,” and warned that any short-term recovery would likely attract more selling.
He added that many investors are using brief price rallies to exit positions opened during the earlier bullish wave.
Bitcoin’s failure to bounce with other risk assets has further exposed weak liquidity and fading risk appetite. Analysts said its normal upside correlation with equities has broken down, showing how fragile the digital asset space has become.
Glassnode also noted that implied volatility, a gauge of expected price swings, has started to decline and usually continues to shrink after the year’s final major macro event, which in this case was the December 10 FOMC meeting.
The firm said that without any hawkish surprises from the Fed, gamma sellers are likely to return and speed up volatility decay through the rest of the year.
Gamma sellers, often market makers or institutional traders, make profits when the market stays calm but face steep losses when sharp price moves hit.
ETFs lose momentum as traders stay cautious
Mitch Galer, a trader at GSR, said the macro backdrop has become the key force driving crypto prices.He pointed to how trading flows have had an outsized effect recently, describing that as typical for a bearish setup.
Galer said uncertainty tied to a US government shutdown, reduced Fed data access, and geopolitical unpredictability have made investors cautious. While he expects volatility to stay high in the near term, he also sees some potential for a rebound toward year-end since sentiment is already “heavily negative” and prices have stopped collapsing.
Timothy Misir, head of research at BRN, said the current stability is built on a “fragile foundation.” He cited thin liquidity and divided ETF flows, saying the crypto market is “searching for direction rather than committing to one.”
ETF flows, once a strong source of support, are now losing steam. BlackRock’s IBIT saw investors pull out around $2.3 billion last month, its largest monthly withdrawal so far and only the second of the year.
Though the outflows represent just 3% of IBIT’s total assets, they’ve sparked worries that long-term holders are starting to rethink their conviction.
Still, data from Bernstein analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia shows that despite the steep price drop, total outflows from the twelve spot Bitcoin ETFs amount to less than 5% of their combined assets.
The analysts said Bitcoin remains in a prolonged bull cycle, with institutional buying staying relatively steady and absorbing the ongoing wave of retail selling.
Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.
