Bitcoin’s year-to-date 30% rally “fully erased,” market slips into a bear phase

As enthusiasm for a perceived pro‑crypto stance by the U.S. government fades and risk‑off sentiment intensifies, Bitcoin faces a stern test, with the broader crypto market’s bear trend seemingly deepening.

The largest cryptocurrency by market capitalization fell below USD 93,714 on Sunday, a level beneath its closing price at the end of 2024, implying that gains of more than 30% earlier this year have been “fully erased.”

The slide has unfolded little more than a month after Bitcoin set an all‑time high. On October 6, the price surged to a record USD 126,251, but four days later, following unexpected tariff remarks by U.S. President Trump that disrupted global markets, Bitcoin began a sustained decline.

A reduction in institutional participation is a core driver of the downturn. Bloomberg data indicate that Bitcoin exchange‑traded funds (ETFs) drew more than USD 25 billion in inflows this year, lifting total assets under management to roughly USD 169 billion. Those steady allocations had helped reposition Bitcoin as a portfolio diversification tool.

However, as large buyers—including ETF allocators and corporate treasuries—quietly step back, the “hedge asset” narrative is “becoming fragile again.” A notable example is Michael Saylor’s Strategy Inc., whose share price now trades close to the value of its Bitcoin holdings, signaling investors’ reluctance to pay a premium for a highly leveraged Bitcoin strategy.

Macroeconomic headwinds and leverage deleveraging are compounding pressures. Matthew Hougan, Chief Investment Officer at Bitwise Asset Management, noted that “the overall market is in risk‑off mode,” adding that “cryptocurrency is the canary in the coal mine, reacting first.”

A concurrent pullback in technology equities has dampened risk appetite across markets. Jake Kennis, Senior Research Analyst at Nansen, described the sell‑off as “a confluence of long‑term holders taking profits, institutional outflows, macro uncertainty, and leveraged longs being liquidated.” He added that after an extended consolidation, the market has temporarily chosen a downward path.

Losses have been more severe among altcoins. Broad pessimism is accelerating liquidation: Matthew Hougan observed that “retail sentiment in crypto is quite negative,” with many investors exiting early to avoid another 50% drawdown. This negativity is most visible in smaller, more volatile tokens.

Reports show the MarketVector index tracking the lower 50 of the top 100 digital assets has fallen by about 60% this year. Chris Newhouse, Research Director at decentralized finance firm Ergonia, similarly noted widespread “skepticism toward capital deployment and a lack of natural bullish catalysts.”