Bitcoin has fallen over 50% from its October high last year, and the crypto market is in a deep correction

After Bitcoin hit an all-time high of approximately $126k in October 2025, its rally came to an abrupt halt. Recently, the price briefly fell below $60k, with a cumulative decline of over 50% from the peak, nearly halving and officially entering a technical bear market. Major coins such as Ethereum and Solana followed the decline, and the total daily liquidation amount across the network repeatedly exceeded $1 billion.

This deep correction is the result of a confluence of macro headwinds and capital flight. The Federal Reserve's inflation rebound and delayed rate cut expectations have tightened global liquidity, with high interest rates suppressing risk asset valuations. U.S. spot Bitcoin ETFs have seen sustained net outflows, institutional arbitrage positions being closed, coupled with MicroStrategy's rare reduction in holdings, breaking the "long-term HODLing" narrative and triggering panic selling. Previously, highly leveraged long positions were chain-liquidated after breaking through key support levels, and deleveraging amplified an orderly correction into a stampede. In addition, the AI sector has siphoned speculative capital, and rising geopolitical risks have also weakened crypto market demand.

On the impact side, the paper wealth of whales and retail investors has shrunk significantly, and the safe-haven aura of "digital gold" has faded—Bitcoin's correlation with the NASDAQ has instead strengthened its high-risk nature. Some mining farms are selling inventories to raise funds, increasing supply pressure. Looking ahead, short-term downside risks have not been fully released. The market is watching for signals of a Federal Reserve policy shift and whether ETF inflows can return to net positive. If macro pressure eases, the market may gradually bottom out and recover by the end of the year as liquidity improves.