Cryptocurrency analysts have put forward various views on the reasons for the significant drop in the cryptocurrency market this weekend, but they also emphasized that this is a regular phenomenon in the cryptocurrency cycle.
Many executives in the cryptocurrency industry believe that the recent market decline may be related to the outflow of funds from cryptocurrency ETFs, long-term whale sell-offs, and escalating geopolitical tensions. On Sunday, Bitcoin briefly fell to nearly $93,000.
Bitcoin briefly touched a new low for the year at $93,029 on Sunday. The overall market capitalization has also retreated over the past seven days, from $3.7 trillion on November 11 to $3.2 trillion on Monday, according to data from CoinGecko.
Ryan McMillin, Chief Investment Officer of Australian crypto investment management firm Merkle Tree Capital, stated in an interview with Cointelegraph that no single event led to the current market downturn.
Multiple factors are dragging down crypto prices.
McMillin noted that on-chain data shows long-term holders "are finally starting to cash out after an extraordinary surge," which is one reason, while "good fundamentals and liquidity tailwinds also provide room for further price declines."
"Meanwhile, spot Bitcoin ETFs and other tools that were massive buyers early in the cycle have turned to net outflows, as global markets become more risk-averse and rate cut expectations are pushed back."
"Overall, you will find that old coins are being allocated to a softer buy side in a macro environment that is much less forgiving than six months ago," McMillin added.
Matt Poblocki, General Manager of Binance Australia and New Zealand, stated that this volatility reminds us that cryptocurrencies remain a mature asset class influenced by global macroeconomic and political events.
Meanwhile, Holger Arians, CEO of Banxa, stated that the market is operating very hot relative to the world.
"We are dealing with some unresolved, and in some cases escalating, geopolitical tensions. At the same time, global tech valuations are continually rising in future expectations. After a year of optimism, a more widespread risk-averse moment is almost inevitable," he said.
"While cryptocurrencies can sometimes operate independently of traditional market fluctuations, this is a time when people are simply waiting, observing, and trying to understand the tumultuous years."
Other crypto executives on platform X also shared their views. Bitwise Asset Management CEO Hunter Horsley believes that the four-year cycle narrative may be the catalyst for this round of pullback, as traders worry about downturns occurring every few years, leading them to sell and inadvertently fueling the adjustment.
Tom Lee, chairman of Ether Treasury company BitMine, believes there is "a significant gap" on the balance sheets of market makers that could trigger liquidations by surrounding sharks.
Sharp pullbacks are a regular part of any market.
However, most crypto analysts say that the underlying market remains strong.
"This sharp pullback is a normal part of the market cycle," Poblocki said.
"Importantly, we continue to see retail investors staying in the market and turning to blue-chip assets like Bitcoin and Ethereum instead of completely exiting. This is a strong signal of long-term confidence."
"ETF flows have weakened slightly in line with broader risk sentiment, but we haven't seen significant redemptions. The big picture hasn't changed—institutional participation remains high, and retail investors have taken a more cautious approach," he added.
Arians stated that as the fundamentals develop in the right direction, market pullbacks may reverse, and there will be more regulatory clarity, more real-world use cases, and traditional finance boldly entering the crypto space more frequently.
"Even if the price feels weak, the underlying infrastructure story has never been stronger. Stablecoin trading volume, on-chain activity, developer momentum—all of these are quietly moving in the right direction. The market may feel slow, but the tracks being laid now are preparing for the next cycle," Arians added.
The crypto market remains stronger than in previous cycles.
McMillin shares a similar stance with macro analyst and Wall Street veteran Jordi Visser, who believes that old Bitcoin holders are simply selling to new traders ready to take over.
"In previous cycles, with this level of long-term holders selling off, we should have seen a 70-80% drop by now; instead, despite the heavy OG allocation, the price has dropped much less because ETFs and other institutional channels are deep enough to absorb a large amount of stocks," he said.
"This is a sign of market maturity and a necessary movement of coins from a few to the many."
