The cryptocurrency is struggling to return above the $100,000 barrier.
The price of Bitcoin (BTC) has dropped to below $95,000, yesterday Friday, marking its lowest level since May, after a loss of over 13% during the last month.
Bitcoin is struggling to return above the important psychological barrier of $100,000, raising concerns about the possibility of the cryptocurrency market entering a new digital winter.
According to Coinglass data, outflows from Bitcoin exchange-traded funds surpassed $1.1 billion in just two days, while the fear and greed index in the cryptocurrency market indicates a level of extreme fear.
Tom Lee: Bitcoin is poised to rise to $200,000 within 60 days.
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Cryptocurrencies Tom Lee: Bitcoin is poised to rise to $200,000 within 60 days.
Why is Bitcoin declining?
The uncertainty resulting from the prolonged shutdown of the U.S. government deepened investor sentiment, which increased the markets' tendency towards caution. With the government reopening, liquidity may become available again and return to financial markets, and important economic data will begin to flow, which may help change the market direction in favor of Bitcoin.
On the other hand, the interest rate factor remains influential in cryptocurrency markets. The Federal Reserve has become less inclined to cut interest rates next December, according to the CME Group, which places the probability of a cut at about 55%. Interest rate cuts are considered a strong catalyst for investing in high-risk assets, including cryptocurrencies, according to the American platform The Motley Fool.
Experts indicate that the market may have reached saturation after significant gains over the past five years, as enthusiasm for Bitcoin has begun to wane after a period of intense institutional money flow and expected support from a crypto-friendly administration.
Are we facing a "digital winter"?
The term "digital winter" is often heard in digital circles, but it does not carry a specific definition, unlike the stock market, where a market is classified as bearish when prices drop by more than 20%. Typically, a digital winter is a long period of negativity and pessimism in the market.
Considering that Bitcoin just recorded its highest level in six weeks, discussing the onset of a digital winter seems premature. Recent history shows that large declines do not always lead to the onset of a long-term bear season:
April 2021: Bitcoin recorded $63,500, then fell in July to below $30,000 (-50%).
November 2021: Reached $67,000, then fell in January 2022 to about $35,000 (-50%).
December 2024: Surpassed the $100,000 mark to reach $106,000, then fell in April 2025 to $76,000 (-30%).
Each time, Bitcoin managed to recover and break new record levels.
Why is Bitcoin declining?
The uncertainty resulting from the prolonged shutdown of the U.S. government deepened investor sentiment, which increased the markets' tendency towards caution. With the government reopening, liquidity may become available again and return to financial markets, and important economic data will begin to flow, which may help change the market direction in favor of Bitcoin.
On the other hand, the interest rate factor remains influential in cryptocurrency markets. The Federal Reserve has become less inclined to cut interest rates next December, according to the CME Group, which places the probability of a cut at about 55%. Interest rate cuts are considered a strong catalyst for investing in high-risk assets, including cryptocurrencies, according to the American platform The Motley Fool.
Experts indicate that the market may have reached saturation after significant gains over the past five years, as enthusiasm for Bitcoin has begun to wane after a period of intense institutional money flow and expected support from a crypto-friendly administration.
Are we facing a "digital winter"?
The term "digital winter" is often heard in digital circles, but it does not carry a specific definition, unlike the stock market, where a market is classified as bearish when prices drop by more than 20%. Typically, a digital winter is a long period of negativity and pessimism in the market.
Considering that Bitcoin just recorded its highest level in six weeks, discussing the onset of a digital winter seems premature. Recent history shows that large declines do not always lead to the onset of a long-term bear season:
April 2021: Bitcoin recorded $63,500, then fell in July to below $30,000 (-50%).
November 2021: Reached $67,000, then fell in January 2022 to about $35,000 (-50%).
December 2024: Surpassed the $100,000 mark to reach $106,000, then fell in April 2025 to $76,000 (-30%).
Each time, Bitcoin managed to recover and break new record levels.
