The recent drop in the price of Bitcoin is due to a mix of economic and behavioral factors, most notably sales from large investors, a decline in institutional interest, and short-term liquidity pressures.
Here is a logical and convincing analysis of the reasons for this drop:
📉 The main reasons for Bitcoin's drop in 2025
Sales operations from 'whales'
Major investors who bought Bitcoin at low prices in past years have started taking profits at record levels exceeding $110,000, leading to significant selling pressure according to MEXC Global Blog.
Decline in institutional interest
Some financial institutions that supported Bitcoin through ETF funds and corporate treasuries have started to reduce their purchases, weakening the institutional demand that had been a strong support for the price according to Bitget.
Tightening monetary policies
The increase in interest rates by the US Federal Reserve has raised the cost of holding non-yielding assets like Bitcoin, pushing investors toward more stable instruments according to Bitget today.
Legislative setbacks and political fluctuations
The CLARITY bill, which was expected to clarify the regulatory framework for cryptocurrencies, has stalled in Congress, increasing legal uncertainty about the future of Bitcoin according to Bitget today.
Short-term liquidity pressures
With market fluctuations, some investors and institutions faced pressure to provide liquidity, prompting them to sell part of their digital holdings to cover other obligations according to MEXC Global Blog.
🔍 Why is this decline different?
Unlike previous crashes driven by individual speculation, the decline of 2025 came amid significant institutional participation and deep economic and regulatory developments. This means the market has become more mature but also more affected by macroeconomic factors according to Bitget today.
📈 Is there hope for recovery?
Despite the decline, there are still positive indicators:
Some institutions continue to quietly absorb new supply.
Development of regulatory infrastructure in countries like the UAE and Singapore.
Long-term interest from major companies in using Bitcoin as a reserve asset.
All these factors may contribute to price stabilization and gradually rebuild trust.
