Bitcoin has fallen beneath the key $90,000 mark for the first time in seven months, broadening a decline that has undermined faith in the asset and erased its gains for 2025. The drop, driven by a mix of macroeconomic pressure, rapid ETF outflows, and overall liquidation, is one of the more turbulent periods for digital assets since early October. The largest cryptocurrency in the world hit lows around $89,250 before bouncing back to trade in the upper $93,000 range at the start of Tuesday. Even when trading at that level, Bitcoin is still roughly 26% away from its all-time high above $126,000, which occurred at the beginning of October. Over the past six weeks, the cryptocurrency space has lost nearly $1.2 trillion, which is what shows how significant this decline has been.

ETF Outflows Accelerate the Decline

As sentiment waned, U.S. spot Bitcoin ETFs emerged as a significant source of selling pressure. Beginning on October 10th, the ETFs experienced > $3.7 billion in outflows, including over < $2.3 billion in November alone. These ETF redemptions caused NFT issuers to sell actual Bitcoin, exacerbating selling pressure during an already poor buying market.

Several retail traders, especially those who entered during the ETF-induced rally earlier this year, have since left after experiencing a flash crash in October that wiped out > $19 billion in leveraged positions. Without their dip-buying appetite, the market struggled to find firm support. Institutional sellers have also placed further pressure. Some traders anticipated more clarity in terms of regulation in and after late 2025, but there have been too many delays and uncertainty of politics for many to feel comfortable re-evaluating risk in crypto.

Corporate Bitcoin Treasuries Under Stress

One of the key trends of 2025 was companies buying Bitcoin and holding it as a reserve asset. Some companies, especially not in the crypto space, brands, tech companies, and even third-party logistics companies, publicly declared their intentions to build up Bitcoin reserves. But Bitcoin's recent pullback is putting pressure on this asset strategy. Standard Chartered Bank remarked that a decline below $90,000 could put half of the 'listed' companies that hold Bitcoin underwater. Public firms collectively own around 4% of circulating Bitcoin.

The largest corporate holder, Strategy Inc., continues to aggressively accumulate Bitcoin. Founder Michael Saylor announced the purchase of 8,178 more Bitcoin, bringing the company's total to 649,870 tokens, with a cost basis of around $74,433. While Strategy continues to remain profitable, many smaller companies are confronting tough boardroom discussions and deteriorating valuations on their balance sheets as Bitcoin trades around a critical level of support.

Liquidations and Leverage Fuel the Volatility

Bitcoin's fall below $90,000 set off yet another wave of volatility across crypto exchanges. Within 24 hours, nearly $950 million in liquidated long and short leverage bets were wiped out. This rise in liquidations further snowballed the price drop, triggering further sales through cascading margin calls on derivatives exchanges. This is not entirely novel. Every bitcoin cycle contains pullbacks of roughly 20–30 percent to flush out weak and excessive leverage. These washouts generally are precursors to long-term upward trends, but magnify volatility and fear in the hour.

Tech-Stock Correlation Strengthens

Bitcoin's actions and price direction have recently shown an elevated correlation with high-growth tech stocks, especially those with artificial intelligence exposure. When investors pull down their risk, both assets are declining in value. This is contrary to the story that Bitcoin is a hedge against some uncertainty. In 2025, Bitcoin has increasingly functioned as a speculation: benefiting when risk appetite is present and dropping hard when investors decrease their risk appetite.

Nonetheless, some analysts believe the Bitcoin price action is simply magnifying a risk-off environment that would have happened regardless. The fact that both assets are declining in value implies that investors are re-evaluating valuations, which may signal future upside, as opposed to specifically weakness related to crypto price action.

What Happens Next?

While market pressure remains heavy, it's not total doom across the board. Some analysts see Bitcoin slipping below $90,000 as a necessary reset to establish the momentum for the next bull cycle. Following past cycles, we have consistently seen similar drawdowns happen before a breakout. Supporters of Bitcoin add that long-term buyers, especially large institutions and corporate treasuries, should see the dip as a deeper opportunity to build their inventory, should the macro picture stabilize by early 2026. Others will warn that the upcoming months may reflect intense volatility as Bitcoin may revisit lower support in the $85,000 and even $80,000 range. Ethereum and altcoins remain under pressure as well. Ether has dropped nearly 40% since its August high above $4,955. This just confirms the ongoing shift to a broad risk-off environment, rather than just Bitcoin-focused selling.