Geopolitical tensions, institutional sales from firms like BlackRock, statements from U.S. Politicians, and a general risk-off sentiment are contributing to downward pressure on Bitcoin, resulting in a more than 50% decline over the past four months.
As of approximately 9:20 PM on Thursday, the cryptocurrency traded at $60,074, a 17.43% decrease in a single day. Looking back four months – from , when Bitcoin reached its most recent historical high of $126,198.07 – the decline exceeds 50% (52.4%).
According to platform CoinMarketCap, the recent drop is primarily attributable to a de-leveraging of long positions, with $1.23 billion in BTC liquidations (80% long positions) forcing rapid sales. These liquidations occur when the price falls to a point where margin calls are triggered on leveraged positions, leading to automated sell orders to cover potential losses.
These widespread sales are rooted in a broader risk aversion linked to economic and political events. A recent regulatory statement from the U.S. Department of the Treasury played a role. Institutional confidence weakened following comments from Treasury Secretary Scott Bessent, who ruled out government or bank bailouts for cryptocurrencies. This lack of a safety net influenced more cautious capital and triggered a wave of institutional selling, exacerbating the existing bearish sentiment.
Analysts agree that the mass liquidations are tied to the political and economic context. Financial analyst Mariel Lang Saez stated, “The 50% correction is not a crypto anomaly. It’s macro amplified.” She explains that, unlike previous cycles, Bitcoin is now integrated into the traditional financial system. The same ETFs and institutional inflows that drove it to its historical high of $126,000 are now accelerating the decline when risk appetite contracts.
Julián Colombo, director of Bitso for South America, echoes Lang Saez’s assessment, adding further context to the decline: “On one hand, crypto regulation is facing certain tensions internally in the United States, as banks and traditional financial system actors are delaying implementation. Added to this is the significant discussion regarding the Clarity Act, legislation regulating the general aspects of crypto assets in the United States. All of this, coupled with some uncertainty about U.S. Economic indicators (for example, a possible new government shutdown) and other global impacts, such as the possible intervention of the Japanese yen, contribute to driving the decline.”
The market is falling due to institutional sales, ETF outflows, and growing macroeconomic uncertainty, according to Carolina Gama, country manager for Argentina at exchange Bitget. She notes that Bitcoin has become more correlated with traditional markets, particularly the S&P 500 and technology stocks.
“Its performance has largely responded to the tone of the Federal Reserve: although there were rate cuts in the last meetings of 2025, communication remained cautious, moderating risk appetite. More than a negative signal, this reflects the fact that BTC has been incorporated as an asset within the institutional investment universe, unlike the bubble it was living in until recently,” Gama interprets.
Following Bitcoin’s record high in late 2025, subsequent months have seen an increasingly steep decline. The peak lasted only four days: on the 10th of that month, Trump announced tariffs of 100% on China, and the “digital gold” fell from $122,000 to $104,782 in hours. According to Lang Saez, $19.13 billion in leveraged positions were liquidated that day – between 10 and 20 times more than the COVID crash or the FTX collapse, making it the largest deleveraging event in cryptocurrency history.
Lang Saez adds that the Federal Reserve cut rates three times in 2025, from 4.25% to 3.50%, and then to 3.75%. On , Powell stated, “We are not in a hurry to continue cutting.” Global liquidity has also deteriorated, traditionally leading many to seek refuge in less risky assets. The specialist explains that the tariffs imposed by Trump (the effective U.S. Tariff rate rose from 2.4% to 16.8%, the highest level since 1946) led institutional capital to prefer gold as a safe haven over digital assets.
Despite this backdrop, the sharp pullback in the asset over just four months does not worry long-time Bitcoin proponents. “For those with patience and a long-term vision, Bitcoin remains an excellent investment option,” Gama points out, explaining that despite short-term volatility, the asset maintains solid fundamentals. She also notes that “these types of corrections have not been unusual in the Bitcoin cycle, as there were declines of 93% in 2011, 84% in 2015, 83% in 2018 and 76% in 2022, which were followed by significant recoveries.”
Colombo shares Gama’s view, explaining that Bitcoin typically behaves in cycles, with periods of declines and rises. He adds that, after a high, it usually reduces its value until it finds a point of resistance, something that, in his opinion, has not yet consolidated. He also adds an important detail: “This Bitcoin cycle has a particularity that, unlike others, which were more retail or individual investors, this one is more institutional, so political factors also come into play, driven mainly by decisions of the United States, both at the regulatory level and other aspects of the Donald Trump government.”
Bitget also interprets the recent Bitcoin decline more as a phase of market readjustment than a structural collapse. They agree with Colombo that part of the immediate pressure comes from institutional sales: U.S. Spot Bitcoin ETFs have recorded significant outflows since October, with more than $7 billion in November, nearly $2 billion in December, and more than $3 billion in January. Gama explains that this has reduced liquidity and left the asset more exposed to short-term, abrupt movements.
At the same time, Lang Saez warns that, despite the outflows, “ETFs still hold 1.27 million Bitcoins, just 5% below the peak. The long-term institutional base has not dismantled. They are at a loss, but they haven’t left.” She points out that nearly 200 public companies purchased approximately $96 billion in Bitcoin during 2025.
while the price shows a deep correction in the short term, many analysts continue to see Bitcoin as an asset whose strength lies, above all, in the long term. “Corrections are cyclical and healthy. If we look at its evolution over the last 10 years, This proves an asset that has been able to revalue consistently,” Colombo concludes.
