Why the fall of Bitcoin below $90,000 will erase all gains by 2025

Bitcoin $90,000 fall: market shockwave

The cryptocurrency market has recently experienced significant turbulence,BitcoinPrice fluctuations have reached historical highs, with mainstream digital assets falling below the critical $90,000 mark yesterday. Bitcoin's drop below $90,000 triggered a chain reaction, impacting the entire crypto ecosystem, affecting not only retail investors but also institutional investors who have been continuously accumulating since 2025. Previously, Bitcoin had stabilized above $95,000 for three consecutive weeks, and this sharp decline has shattered that calm. The sudden sell-off has triggered a series of liquidations on mainstream exchanges, including Gate, with trading volumes surging to an average of 3.5 times the usual, leading to a spread of panic. Technical analysis indicates that the breach of the 100-day moving average is a significant factor in accelerating the decline, with sell orders overwhelming buy orders at critical price levels. Market data shows that over $2.8 billion in leveraged positions were liquidated within 24 hours, setting a new single-day liquidation record for 2025. The event directly impacts the derivatives market,futuresThe premium turned negative for the first time since December last year, indicating a sharp shift in market sentiment from extreme greed to fear.

2025 Rise Decline: Analysis of Reversal Reasons

The recent crash of Bitcoin has erased all gains for 2025, and analysts generally believe this is a "perfect storm" resulting from multiple negative factors. Looking back at this reversal, several key events have become the main reasons for the market downturn. In October, the global macroeconomic environment changed dramatically, with major central banks taking a tough stance against inflation, strengthening their local currencies against digital assets. Additionally, the three major economies announced higher-than-expected cryptocurrency tax frameworks, increasing regulatory uncertainty. More importantly, on-chain data shows that dormant Bitcoin wallets from 2011 have become unusually active, with about 28,500 BTC flowing into exchanges before the crash. Such transfers coincide with traditional market liquidity concerns, amplifying investor panic. The performance comparison between Bitcoin and traditional safe-haven assets highlights the extent of this reversal.

The cryptocurrency price trend shows that Bitcoin has recently shifted from outperforming traditional assets to clearly lagging behind.

Cryptocurrency Market Turbulence: In-Depth Analysis of Year-to-Date Losses

The Bitcoin crash has affected the entire cryptocurrency market, with losses since the beginning of the year spreading to all mainstream digital assets. As a market barometer, Bitcoin's price movements usually influence the entire industry, and the correlation during this downturn has reached unprecedented levels. Mainstream altcoins have suffered even greater declines, with many coins losing 30-45% in the past week. Data from Gate shows that trading volume for stablecoin pairs has hit a historical high as investors seek refuge. The overall industry pullback has affected different sectors to varying degrees, with DeFi tokens and new Layer 1 protocols suffering the most. Investor sentiment indicators have fallen to their lowest level since March 2023, with the "Fear and Greed Index" at just 18/100, indicating extreme fear. On-chain data shows that the network's fundamentals continue to deteriorate, with hash rates down about 12% compared to last week, and miners' profitability decreasing. The inflow to exchanges has surpassed outflows for nine consecutive days, indicating that selling pressure still exists in the market. Institutional sentiment has also weakened, with industry reports showing a net outflow of over $1.2 billion from crypto investment products in the past two weeks.

Bear market alert: Has the downward cycle begun?

The multi-period technical indicators have issued a strong bearish warning for Bitcoin to the market, which should not be ignored. The weekly chart shows that Bitcoin has broken below the 20-week moving average for the first time since January 2025, which has historically been an important signal of trend reversal. The monthly RSI has shown a top divergence, failing to confirm the high before the crash. The deterioration of technical factors interacts with the weakening of the fundamentals, including a simultaneous decline in trading volume and on-chain activity. Reviewing past Bitcoin cycles, the current market structure is very similar to historical correction phases, but this round has new changes in institutional participation and adoption indicators. The options market further corroborates this, with the Put/Call ratio rising to 1.37, a new high for 2022, indicating strong demand from investors for downside risk protection. Futures contracts on several exchanges, including Gate, are showing significant discounts, with December contracts trading at a 2.3% discount to spot. The funding rate for perpetual contracts has maintained negative values for the longest period in mid-2025, with a significant reversal in market sentiment. Although history shows that Bitcoin has strong rebound capabilities after multiple corrections, the current market environment presents unique challenges, and the recovery cycle may be prolonged.