Anyone even casually following the crypto market lately will certainly have noticed that Bitcoin has been on a seemingly unstoppable ascent for almost three years now. From a local low of $16,529 on 31 December 2022, the original crypto rose over 600% to reach an all-time high above $124,000 in early October 2025. Fortunes were made multiple times over, but like all bull markets, a major correction eventually came. After recovering somewhat from a similar albeit less dramatic correction in August, BTC has now declined almost 20% in the space of just one month. However, unlike then, the key psychological level of $100,000 was breached, even if only for a few hours. Now, many are concerned that this might only be the beginning of a long crypto winter like the one seen in 2021-2022.
This most recent sell-off has been led by whales (wallets holding more than 100 BTC), with an estimated 400,000 BTC having been sold by such investors for a total value of $45 billion. Unfortunate realities like the US government shutdown and intensifications in the trade war with China have certainly worked to exacerbate any negative sentiment and amplify selling. And of course, profit-taking by longer-term holders is totally natural and predictable in a context of multi-year gains of such magnitude. But how are these factors currently evolving, and what is likely to be their impact on Bitcoin's price going forward?
Whaling wall
As we already touched upon, the typically profitable month of October, dubbed "Uptober" on account of its tendency to deliver gains, has been characterised this year by a major correction. This past month's nearly 20% leg down was caused largely by a sell-off among major Bitcoin investors, totalling $45 billion by the latest estimates. First and foremost, it's important to note that many whales are businesses that need to post real profits quarterly and annually. To do so, they must occasionally sell. The achievement of yet another ATH so close to the end of the year would surely be a tempting selling opportunity for funds whose average price per BTC held is significantly below $120,000.
That said, there was reason for BTC investors to worry about a possibly devastating miner-led sell-off when the profitable Marathon Holdings moved 2,348 BTC worth $236 million to various exchanges after purchasing almost the same amount just one month prior. Head of Research at K33, Vetle Lunde, pointed out that "over 319,000 Bitcoin has been reactivated in the past month, mainly from coins held for six to twelve months, suggesting significant profit-taking since mid-July." However, according to CoinGlass, $2 billion in crypto positions were liquidated in 24 hours from 4-5 November, which is modest compared to the $19 billion in forced unwindings seen during last month's major correction. Open interest in Bitcoin futures is still lower than usual, and options traders have been shorting BTC through puts targeting the $80,000 level. Like it or not, it looks like we'll just have to take a wait-and-see approach until it becomes clear whether the worst is behind us or there's more of a way to fall yet.
Fundamentally speaking
Moving from the immediate to the longer-term, environmental context, we see an increasingly favourable landscape for risk assets such as crypto. After already delivering two rate cuts, the Federal Reserve announced another 25 bps reduction last week (29 October). What's more, inflation remains steadily below the long-term average of 3.28%, even if it is above the Fed's 2% target, though this shouldn't threaten the regulator's declared dovish policy too much. Surprisingly, however, Bitcoin's failed attempt to recover its losses took place in the run-up to the meeting, after which it declined back to its current level of $102,021. It could be that the markets were hoping for a 50 bps cut or at least expecting more encouraging rhetoric from Fed chair Jerome Powell about the potential for further easing before the year's end. However, the problems he cited, including the ongoing government shutdown and trade flare-up with China, are certainly concerning.
Indeed, it is likely investors' worries about these factors that turned an ordinary circa 10% profit-taking correction into a deeper 20% decline. Of particular importance to crypto, and miners especially, was China's expansion of its rare earth export controls, which saw five new rare earth elements banned. After Beijing agreed on 30 October to suspend these measures for one year, we will likely see a stabilisation of bearish sentiment, allowing the advantages of lower rates and more attractive pricing to bring in more buyers. It's also important to note that $45 billion is not quite as devastating as it first sounds now that Bitcoin's market cap exceeds $1 trillion, and with no significant losses registered on 5 November, the worst could be over.
Trade CFDs on Bitcoin and more with Libertex
With Libertex, you can trade a wide variety of CFDs across multiple asset classes. From stocks and ETFs to currencies, futures, and, of course, crypto, Libertex's CFD offering is extensive. Our CFD cryptocurrency portfolio includes legacy digital assets like Bitcoin and Ethereum, as well as the Grayscale Bitcoin Trust and a wide selection of spot Bitcoin ETFs. For more information or to create an account of your own today, visit www.libertex.org/signup.
