Since October 2025, Bitcoin, the world’s largest cryptocurrency, has entered a deep correction, plummeting from an all-time high of 126,000 to a trading range of 85,000-88,000 as of November 24th—representing a cumulative drop of over 30% and wiping out all gains for 2025. The selloff has triggered a chain reaction across the crypto market: major altcoins have fallen by an average of more than 20%, margin calls have surged in the derivatives market, and the total market capitalization has evaporated by over 300 billion. Market sentiment has plunged into the Extreme Fear zone, with the Federal Reserve’s policy pivot and institutional outflows emerging as the core drivers. The market is currently in a critical phase of testing key support levels.

Bitcoin Plunges Over 30%: From $126K to $85K, 2025 Gains Fully Erased
（Bitcoin is the world’s largest decentralized cryptocurrency built on blockchain technology. Jonathan Borba/Unsplash）

Three Major Headwinds Trigger the Selloff

The Federal Reserve's November FOMC meeting explicitly signaled that interest rates will remain higher for longer, causing the probability of a December rate cut to drop from 70% to 44.4%. Expectations of tighter liquidity have dealt a heavy blow to high-risk assets like Bitcoin. U.S. spot Bitcoin ETFs have seen five consecutive weeks of net outflows, totaling 2.6 billion, while whale addresses holding over 1,000 Bitcoins reduced their holdings by 23,000 coins in November—a 12% decrease. Large-scale selloffs, including a single transaction of 5,000 Bitcoins on November 4th, triggered algorithmic stop-loss cascades, creating a vicious cycle of selloffs → declines → further selloffs. Compounded by a historically high leverage ratio of 18%, single-day liquidations reached 950 million when Bitcoin breached the $100,000 mark, as retail investors’ panic selling exacerbated liquidity vacuum

Market Shows Signs of Consolidation at Lows

As of November 24th, Bitcoin trades at 87,400 with a total market capitalization of 1.73 trillion. The 85,000 level has become a key support; a break below this threshold could push prices to the 80,000-$82,000 range. The market structure shows clear divergence: long-term holders (with positions exceeding 1 year) maintain 72% of their holdings, while retail participation remains sluggish—crypto funds have recorded eight straight weeks of outflows. Capital is shifting toward utility-focused assets: Ethereum and other tokens with real-world use cases have seen significantly smaller declines than speculative altcoins

Fed Decision Holds the Key to Future Trends

The Federal Reserve’s December 10th FOMC meeting will dictate short-term movements. A pullback in inflation that reignites rate-cut expectations could spark a relief rally for the oversold Bitcoin; conversely, sustained hawkishness may send prices to a previous low of $74,400. Currently, Bitcoin’s MVRV ratio has fallen to a low of 1.76, and some whales have shown signs of bottom-fishing. However, analysts caution that any rebound will face selling pressure from trapped positions, and market confidence will take time to recover. Regulatory developments and liquidity shifts remain core risk factors.