A bitter cold has passed through the cryptocurrency market in recent months, threatening to cut short the sector’s golden era. Analysts fear that we are witnessing a “crypto winter”.
Last year, enthusiasts predicted that the Bitcoin would reach 250,000 dollars until the end of 2025, supported by the President’s promise Donald Trump to transform the United States into the “cryptocurrency capital of the world”.
But the currency since the beginning of October, trading at around 92,000 dollars, while the price of Ethereum retreated almost 1/3remaining just above 3,000 dollars. The total crypto market capitalization shrank by around 25% in that period, losing more than 1 billion dollars.
On Wall Street, notes , crypto is at a “bear” marketterm used when an asset drops 20% compared to a recent peak.
But, says , sector observers wonder whether the decline is turning into something much more feared: a “crypto winter” — a particularly painful type of bear market, in which prices fall for months at a time and Confidence across the asset class appears to evaporate”.
Knowing whether the wave of sales is equivalent to a full winter or just a temporary cooling can become clearer by looking at previous “hibernations” — and where signs of life in the market are looked for.
At the beginning of October, the price of Bitcoin was at a historical maximumafter doubling in one year, driven by Trump’s second term.
What triggered the descent it was a “flash crash” on October 10th, after Trump threatened impose new tariffs on Chinese importsleading investors to dump risky assets like crypto and AI stocks in favor of safe havens like gold and silver — both trading at all-time highs. Bitcoin fell 10% in one week.
The shock was amplified by highly leveraged positions of crypto traders — one of the riskiest practices in the industry. This strategy multiplies both gains and lossesand trading platforms seize investors’ collateral, a process known as liquidation.
On the day Trump announced the tariffs, the drop caused more than 1.6 million crypto traders to face liquidations, which, according to data analysis from , led to a record high of 19 billion dollars in liquidated positions.
Since then, the market has had difficulty catching its breath. “Bitcoin is under pressurein line with other risky assets (see the behavior of AI stocks), but your fall is amplified by a specific factor in the crypto universe,” the analyst told Peter Chung.
The collapse came at a time when concerns were growing that the cryptocurrency bull market was approaching the end.
The enthusiasm surrounding the legislation, the so-called GENIUS Acthas faded, while the uncertainties surrounding tariffsinterest rates and a possible AI bubble. When the stock market is volatile, riskier assets such as cryptocurrencies tend to appear less attractive for investors.
Winter hasn’t arrived yet (for now)
Does this cold period necessarily have to evolve into a real winter, with prices falling for months? At first glance, it would make sense. Historically, when bull markets end, crypto winters follow.
Still, in these cases, the declines were only classified as “winters” when Bitcoin was about 70% to 80% below its all-time high. With the currency just 25% below record highs, by this metric it has not yet been reached to that point.
There are reasons to think that Bitcoin may not fall to such frightening depths. In the past, the price of Bitcoin evolved in “cycles”because of an event that occurs every four years, ““, which reduces the daily supply of new coins issued by 50%.
The last one happened in April 2024, which means that we are in the middle of the cycle. Historically, this is a period when corrections of 20% to 30% occur before prices resume their rise.
“Looking at previous cycles, volatility of this magnitude seems consistent with long-term trends,” he told Jacob Josephsenior research analyst at CoinDesk Data.
The key point, however, is that previous mid-cycle corrections have remained within a “broader bullish structure,” often above relevant technical levels such as the 50-week moving average, Joseph added.
In November, Bitcoin closed below its moving average of 50 weeks, a level that, according to the analyst Tony Severino in a comment on social network X, has been followed by prolonged bear markets.
With more ‘mainstream’ crypto, the rules have changed
Still, the four-year cycle may no longer be a reliable compass for price movements due to the widespread adoption of cryptocurrencies.
This year, traditional investorsfrom retail and institutional, entered into force in digital assets, starting to represent a larger share of the marketso Bitcoin’s movements have increasingly followed stock market sentiment.
Furthermore, as the high AI ratings lead investors to see technology as more risky and speculative assets, bringing them closer to the profile of cryptocurrencies, this correlation has strengthened even further.
In 2025, the correlation between Bitcoin and the NASDAQ 100 indexdominated by technology, more than doubled. The correlation is measured from -1 to 1, with values above zero indicate a positive correlation. The average this year was 0.52, up from 0.23 in 2024.
“One essential prerequisite for any crypto to rise? The stock market has to rise”, he says Mike McGlonesenior raw materials strategist at Bloomberg Intelligence. “But I think stocks will fall next yearand cryptos are leading this movement.”
The bear market that McGlone anticipates will not be limited to the adjustment of inflated valuations in the AI space, but also a consolidation of the crypto market.
“The bottom of the market will only arrive when purging a large part of these ridiculous cryptos”, he says. And although he still doesn’t know how far Bitcoin could fall, McGlone considers it more likely to see the currency reach 50,000 dollars than at 250,000.
Still, analysts at JPMorgan recently took a different reading, maintaining that the bull market remains and rejecting talk of a winter.
In his analysis, thanks to institutional capital and the real-world adoption of stablecoins, liquidity increased, making the market less vulnerable to the oscillations and cycles of the past.
“Overall, we have difficulty viewing these recent corrections as a sign of broader structural degradation in the crypto ecosystem, and so we remain positive in relation to the sector”.
