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Bitcoin wobbles: in three months, it has plunged by 30%, falling from $109,590 to $77,041. Bitfinex dissects this debacle. Behind the sawtooth graphs, a story unfolds: panic among small holders, desertion of institutions, and a macroeconomy that creaks. But is this crisis a shipwreck or a wave to surf?
The Mechanics of Panic
Short-term holders—those actors buying between 7 and 30 days before the crash—have played the arsonists. Their strategy? Sell in pain, crystallizing latent losses. Bitfinex highlights their “psychological capitulation,” a domino effect amplified by the Bitcoin ETFs. These funds, intended to stabilize the market, saw $920 million evaporate in a week.
Institutions, absent from buying back, left the field clear for the rout. Yet, a rebound of 9.5% followed, bringing BTC to $84,357. A glimmer of hope? Yes, but fragile.
Bitfinex recalls a paradox: “A 30% decline has often been the prelude to a historic rebound.” The ball is in the court of the “whales.”
If these institutional investors return massively, they could absorb liquidity and calm nerves.
But confidence is a rare commodity. ETFs, despite their promise of accessibility, reveal their vulnerability. Their role as a buffer against massive sales remains to be proven.
Macroeconomics and Bitcoin
Beyond the numbers, a concerning economic landscape is emerging. The American consumer confidence index is at its lowest since 2022.
The Fed predicts a GDP decline of 2.8% at the beginning of 2025. Inflation lurks, and trade wars rumble.
Bitcoin, often seen as a safe haven, wobbles under these pressures. Even the announcement of a “strategic reserve of bitcoins” by the White House did not quell distrust. Miners, sentinels of the network, scrutinize energy costs and regulations.
The status of BTC as a safe haven? A myth eroded by geopolitical realities. Worse: Bitcoin ETPs have lost $5.4 billion in five weeks. A hemorrhage that raises questions.
Are investors fleeing volatility, or are they anticipating a harsher crypto winter? Bitfinex nuances: “Institutional flows and macro remain key. But historically, the worst is often followed by a rebound.”
In 2025, Bitcoin dances on a thread. Between announced recession and technological hopes, its next move will depend as much on algorithms as on human moods. To those who dare to look: the crypto market drop could just be a springboard.
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Fascinated by Bitcoin since 2017, Evariste has continuously researched the subject. While his initial interest was in trading, he now actively seeks to understand all advances centered on cryptocurrencies. As an editor, he strives to consistently deliver high-quality work that reflects the state of the sector as a whole.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
