Over the past six weeks the crypto world has taken a hard hit. Bitcoin, the barometer of the market, plunged from around $126,000 in early October to as low as $82,000, before a slight rebound pushed it back to the mid-$80,000s.
Why did the price of Bitcoin collapse?
According to Deutsche Bank, several interconnected factors have driven the collapse. First, a broader risk-off environment has hit: bitcoin is now behaving more like a high-growth tech stock than as a standalone currency. “The average daily correlation between Bitcoin and the Nasdaq 100 index in 2025 YTD is 46%, and the correlation with the S&P 500 has risen to 42%,” wrote the bank in a note shared to the media.
Then there is the wider economic backdrop: you guessed it, Trump. Persistent uncertainty about interest-rate decisions from the Federal Reserve has hurt appetite for risk assets, putting downward pressure on crypto.
“Uncertainty around Fed’s interest rate may spur further declines”
Hesitations and changes regarding regulations have also played a role in the wobble. Legislation had been proposed that was meant to clarify the rules for stable-coins and crypto markets, most notably the Clarity Act in the US, has stalled, undermining confidence among institutional investors: “Further uncertainty around the Fed’s interest rate trajectory may continue to spur further declines in Bitcoin’s performance. This year to date, Bitcoin’s correlation of returns with Fed interest rates stands at -13%.”
On top of that, selling from long-term holders triggered a huge shock. Deutsche Bank highlighted that tens of thousands of BTC recently flowed out of long-term wallets, signalling profit-taking and triggering broader selling pressure; as many in the crypto ecosystem withdrew or cashed out, small sell orders quickly snowballed into cascading losses.
Will the Bitcoin price return?
The result has been brutal: roughly US$1 trillion wiped off the total crypto-market value in just a few weeks. “Whether Bitcoin stabilizes after this correction remains uncertain,” Deutsche Bank analysts wrote Monday. “Unlike prior crashes, driven primarily by retail speculation, this year’s downturn has occurred amid substantial institutional participation, policy developments, and global macro trends.”
WHY IS BITCOIN UNDER PRESSURE? DEUTSCHE BANK EXPLAINS
Bitcoin just had its worst week since February, down over 30% from last month’s peak. Deutsche Bank analysts point to five main reasons:
1 – Risk-off mood in markets – Bitcoin is moving like a high-growth tech stock…
— *Walter Bloomberg (@DeItaone) November 24, 2025
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