Bitcoin is in free-fall.
The OG cryptocurrency barreled deeper into bear market territory on Tuesday, trading as low as $89,368 early in the day. That officially wipes out the crypto’s gains since the start of the year, and marks the first time bitcoin has fallen below $90,000 since the tariff-fueled sell-off in April.
After being up as much as 35% year-to-date, Tuesday’s decline has pushed the token into negative territory. Bitcoin is now down 2% in 2025.
Ethereum, the second-largest coin, dipped below $3,000 for the first time in five months. The token is down more than bitcoin year-to-date, falling 8% in 2025.
It’s been a volatile year for bitcoin, which reached a record high above $126,000 just one month ago. The monthslong bull run was fueled by hype for President Donald Trump’s crypto-friendly policies and a post-Liberation Day tariff relief rally that pushed risk assets higher across the board.
But the narrative for bitcoin has changed in recent weeks as investors take chips off the table in high-growth tech stocks and eschew risk in November.
Investors, for one, are concerned about the Fed’s rate-cut trajectory in the coming month and into 2026. Should the central bank lower rates less than expected — a scenario that’s being more seriously considered by investors — that would be bearish for risk assets, like bitcoin, according to Carolane De Palmas, an analyst at ActivTrades.
“The US government shutdown means October economic data may never be released, forcing the Fed to decide with incomplete information. For Bitcoin, which thrives on liquidity expectations, this information vacuum itself is bearish,” De Palmas wrote in a note. “Until the Fed’s path becomes clearer, Bitcoin is likely to remain vulnerable to continued volatility and downside pressure.”
Crypto investors have also been eager to take profits. Since November 12, bitcoin ETFs have seen around $1.8 billion worth of outflows, according to data from the crypto analytics platform CoinGlass.
Other events, like rumors that Michael Saylor’s Strategy sold some of its bitcoin holdings, intensified the drawdown.
“TradFi managers are reducing exposure, given that Bitcoin has wiped out the gains from the beginning of this year. They’re mainly watching the macro environment right now, including the AI bubble, S&P stocks, and tariffs,” Thomas Chen, the CEO of Function, wrote in a note.
Hannes P Albert/picture alliance via Getty Images
Bitcoin has also flashed a few worrying technical signals.
The coin broke through its 50-week moving average as the sell-off intensified last week, a possible reason it has come under more pressure recently, according to Alex Kuptsikevich, chief market analyst at FxPro.
“As expected, the dip below the 50-week moving average at the end of last week triggered sellers, confirming the breakdown of the bullish trend that had lasted for the previous two years. Now, the working scenario appears to be a chance for BTC to dip to its 200-week moving average,” Kuptsikevich said on Tuesday.
Bitcoin’s drop on Tuesday puts it below a “key support” level of around $93,200 flagged by technical analysts and Fairlead Strategies founder Katie Stockton.
Should bitcoin close below that threshold for two weeks straight, that would “mark a concerning breakdown,” she wrote in a note on Monday.
“Fearful sentiment is as extreme as it was at the April low per measures we track for the crypto market,” Stockton said, adding that her firm was bearish on bitcoin over the intermediate term.