Market Performance
Bitcoin experienced a significant downturn on Sunday, falling to $93,029. This decline wiped out all the gains accumulated since January 1st, when the cryptocurrency began the year at $93,507. The drop represents a 25% decrease from its all-time high, which was reached in October. Since then, Bitcoin has seen a partial recovery to approximately $95,209.
Factors Influencing the Pullback
The recent pullback occurred despite a backdrop of positive industry developments throughout the year. These included regulatory momentum under the Trump administration and an increase in corporate Bitcoin treasury adoption. Furthermore, spot Bitcoin exchange-traded funds have continued to attract inflows during this period.
However, several factors have contributed to price volatility. Trump's tariff policies and the extended 43-day U.S. government shutdown led to multiple double-digit price corrections throughout the year. Although the government shutdown concluded on Thursday, the anticipated market relief did not materialize over the weekend.
Investor Behavior and Market Cycles
Long-term Bitcoin holders and large investors, often referred to as whales, have been selling portions of their holdings. This activity has compressed upside momentum, even in the face of favorable regulatory changes. Analysts from Glassnode observed last week that this selling pattern is characteristic of normal bull market behavior observed during late-cycle stages.
"This steady rise reflects increasing distribution pressure from older investor cohorts, a pattern typical of late-cycle profit-taking, not a sudden exodus of whales," the analysts stated.
Altcoin Performance
Other major cryptocurrencies have also seen declines. Ethereum has fallen by 7.95%, and Solana has experienced a steeper loss of 28.3% since the start of the year. Most altcoins have registered even more significant losses during the same timeframe.
Future Outlook and Market Predictions
Industry analysts continue to engage in discussions regarding the validity of the four-year cycle thesis for Bitcoin, especially considering the increased institutional and regulatory backing compared to earlier market cycles. Matt Hougan, chief investment officer at Bitwise, predicts a Bitcoin rally in 2026. He bases this prediction on the debasement trade thesis, expecting broader markets to benefit from increased adoption in stablecoins, tokenization, and decentralized finance.
"I think the underlying fundamentals are just so sound," Hougan said last Wednesday. "I just think those are too big to keep down. So I think 2026 will be a good year."