Bitcoin Stable After Sharp Selloff Erases 2025 Gains

Bitcoin managed a modest rebound after a dramatic slide that erased all of its gains for 2025, underscoring how fragile sentiment has become in risk assets. The cryptocurrency briefly fell below $90,000 for the first time in seven months, touching $89,286 during a volatile session that pushed it almost 30 percent below its October peak of $126,000.

The wider crypto market has shed roughly $1.2 trillion in value over the past six weeks, a drawdown comparable to major equity corrections. Investors continue to react to fading expectations of aggressive US Federal Reserve rate cuts. 

Markets that once priced in a series of reductions now lean toward a slower cycle, with US 10-year yields drifting back above 4.2 percent and the dollar strengthening toward $1.08 against the euro. In this environment, risk appetite has thinned, particularly after a long rally across equities, tech stocks, and digital assets.

Market analysts say institutional investors and publicly listed companies, many of which increased their crypto exposure during the earlier surge, have accelerated their selling, adding to liquidity pressures. Outflows from Bitcoin-linked ETFs have picked up as retail traders remain cautious following October’s flash crash, which triggered about $19 billion in liquidations across leveraged positions.

What Does This Mean for Me?

Research from Standard Chartered suggests that a sustained move below $90,000 could leave around half of corporate Bitcoin holdings underwater. Overall, sentiment remains subdued, with traders waiting for clearer macro signals before re-entering the market.