The bitcoin price is coming off its worst week since February, sliding more than 30% from last month’s highs and reopening an old question for investors: why is this happening now? According to Deutsche Bank, the sell-off isn’t driven by a single catalyst but a combination of market psychology, macro pressure, and shifting investor behavior.
The bank points first to a broader risk-off mood. Bitcoin is behaving less like an independent monetary asset and more like an extended-duration tech stock — moving closely with the Nasdaq-100 as investors de-risk across the board. That correlation has tightened as macro uncertainty rises.
The second driver is the Federal Reserve. Jerome Powell’s recent comments threw cold water on hopes for a guaranteed December rate cut, though New York Fed President John Williams later softened the message. Higher-for-longer rates sap enthusiasm for speculative assets, and the Bitcoin price reaction is no exception.
Regulatory limbo is another weight. Progress on the Digital Asset Market Clarity Act has slowed in the Senate, muting institutional confidence just as new players were beginning to enter the market.
Meanwhile, institutional outflows are accelerating. Several large funds have been trimming positions through November, adding mechanical sell pressure. And long-term holders — some sitting on massive gains after multiple halving cycles — are taking profits into year-end, further amplifying downside momentum.
Bitcoin price traded near $86,000 Monday morning after a modest weekend bounce, recovering from Friday’s close around $84,53. The move raises a bigger debate: is this a healthy correction or the start of something deeper?
Bitcoin price and the Fed: Waller wants to cut ruts
Fed Governor Christopher Waller added nuance to the macro picture. He backed a December rate cut, citing weakening labor markets and stable inflation in the 2.4%–2.5% range. But he warned that January will be “tricky,” emphasizing a strictly data-dependent, meeting-by-meeting approach.
Waller also recently met with Treasury Secretary Scott Bessent amid speculation about a potential Fed Chair nomination, noting that he supports continuing press conferences — though their format may evolve.
Pompliano: Bitcoiners are built for this volatility
Anthony Pompliano offered a wider lens on CNBC this morning, arguing that the Bitcoin price drawdown is historically normal — almost mundane — for seasoned holders. Over the last decade, Bitcoin has seen 21 drawdowns of 30% or more, he said, seven of which exceeded 50%. This level of volatility would resemble “a global financial crisis every year and a half” in traditional markets, but Bitcoin natives view it as routine.
The panic, he argued, is coming from newer Wall Street entrants who aren’t accustomed to such violent swings. Year-end incentives, portfolio rotation, and fear-driven selling are all contributing to the pressure.
But with volatility compressing compared to past cycles, Pompliano believes the current 35% pullback may represent a bottoming process rather than a deep, 70–80% bear-market collapse.
Leverage has also reset, he noted, with open interest sharply lower since the October liquidations. Combined with extreme readings in the Fear and Greed Index, he argues the market is setting the stage for stabilization and a gradual grind higher.
Pompliano says he’s still accumulating, expecting the Bitcoin price to maintain long-term annualized returns in the 20–35% range—lower than the last decade, but still stronger than equities.
Last Friday, the Bitcoin price entered one of its most fragile moments of the cycle, reflecting both price action and on-chain data. It fell to $80,524 on Friday, its lowest since April, dropping over 35% from its all-time high and wiping out all year-to-date gains, dragging overall market risk sentiment down.
Since then, the price rebounded to around $84,000, showing high volatility. Glassnode data revealed realized losses spiking to levels last seen during the November 2022 FTX collapse, with short-term holders—those who bought within 90 days—selling heavily. Realized-loss dominance surged into ranges typically associated with panic.
At the time of writing, the bitcoin price is at $86,003.
