Bitcoin is experiencing a significant downturn, and many investors are feeling the pressure. The sentiment across the cryptocurrency market has shifted from the optimism of "Uptober" just a few weeks ago to a palpable sense of fear.
Since the sharp decline on Black Friday, which was influenced by geopolitical events, the market has seen substantial losses. Open interest worth nearly $20 billion evaporated within hours. Even after the resolution of the US government shutdown, the market continued to fall. Bitcoin broke through the critical $95,000 support level last Friday and has since dropped below $90,000 for the first time in several months.
This situation leaves investors facing a landscape of declining prices and prompts two crucial questions: Has the bull run officially concluded? And should investors consider selling to mitigate further losses?
To understand the current trajectory, it's essential to acknowledge the present reality. The crash that began on Black Friday was not merely a technical anomaly but a reflection of macroeconomic factors. A confluence of renewed trade tensions, the Federal Reserve's cautious stance on interest rate cuts, and a bearish "death cross" on technical charts has created a challenging environment for the market.
Beyond price action, a critical indicator is trading volume. Significant outflows from spot ETFs are being observed. Institutional investors, who were instrumental in driving Bitcoin to its all-time highs in the third quarter, are now reducing their exposure. When major players like BlackRock and Fidelity reduce their buying activity, the retail market often experiences a negative impact.
Bitcoin Dumps: Correction or Bear Market?
This is a pivotal moment in the 2025 market cycle, with differing opinions emerging. Pessimists argue that the 2025 bull run may have been front-loaded, pointing to the fact that Bitcoin has effectively reversed its year-to-date gains. In traditional finance, a 30% drop from its peak coupled with the loss of key moving averages is often classified as a bear market. If the $88,000 support level fails to hold this week, a retest of the $75,000 region could follow.
Conversely, market veterans with experience from the 2017 and 2021 cycles perceive this downturn differently. They suggest that this period of decline resembles mid-cycle corrections that have historically preceded strong upward movements. On-chain data indicates that while short-term holders are selling under pressure, long-term holders, often referred to as whales, have reduced their selling activity. The underlying fundamentals of Bitcoin remain unchanged; the primary factor affected is leverage. The market has just undergone a significant deleveraging event, which, despite its current pain, can clear the way for future growth.
Hold or Dump: An Investor's Perspective
The decision to sell or hold depends heavily on an individual's investment timeline.
For traders, the prevailing trend is downward, and attempting to buy during a sharp decline can be risky. The market is currently highly volatile, and it is advisable for those who are overleveraged to reduce their exposure as a measure of risk management rather than succumbing to panic.
For long-term investors with a horizon of 12 to 18 months, panic selling at this juncture may prove to be a historically poor decision. Selling now could mean providing liquidity to institutions that are likely to repurchase assets at a lower price. The market dynamics often favor those who remain patient. If the initial investment thesis for Bitcoin as digital gold remains intact, the asset presents a mathematically more attractive opportunity at $89,000 compared to its previous all-time high of $126,000.
While the 2025 bull run is facing significant challenges, it is not necessarily over. Historically, the cryptocurrency market has shown resilience and a tendency to recover. For a rebound to occur, Bitcoin needs to regain the $95,000 level to halt the current downward trend. Until then, maintaining a patient approach and avoiding impulsive decisions is recommended. The most rewarding investment strategies are often those that require the most discipline.