Community Trust ScoreLikely Real
Bitcoin slipped below its yearly opening price over the weekend, temporarily wiping out all gains made in 2025. The drop came despite expectations that the reopening of the United States government would help stabilize markets after weeks of uncertainty. Instead, broad selling pressure across crypto pushed Bitcoin and altcoins sharply lower.
Bitcoin fell to $93,029 on Sunday, dipping under its Jan. 1, 2025 opening price of $93,507, according to CoinGecko. Although the asset has since recovered slightly above $94,000, market sentiment remains cautious. The decline marks a 25% pullback from its all-time high reached in October, showing how quickly momentum can shift even during years with strong institutional and regulatory progress.
BTC Drops Despite Pro-Crypto Policies and Strong Corporate Adoption
Coming into 2025, analysts predicted a strong year for digital assets. President Donald Trump’s inauguration in January brought what many describe as the most supportive U.S. administration the industry has seen. His team has already delivered on several crypto-friendly commitments, including regulatory clarity, tax revisions, and support for blockchain innovation.
This positive backdrop was reinforced by corporations rapidly increasing their Bitcoin holdings. Major firms added Bitcoin to their balance sheets, while inflows to spot Bitcoin exchange-traded funds (ETFs) remained steady during most of the year. These developments built confidence that Bitcoin was positioned for another year of strong performance.
However, two political events created unexpected turbulence. Trump’s aggressive tariff campaigns rattled global markets, and the record-breaking 43-day U.S. government shutdown created uncertainty that spilled into crypto. While the shutdown ended on Thursday, the delayed reopening did little to stop risk-off sentiment heading into the weekend.
Whales and Long-Term Holders Add Selling Pressure
Another major factor contributing to Bitcoin’s decline is increased selling from long-term holders and early adopters. Some analysts have framed this as “OG whales dumping,” suggesting whales may be exiting the market. But blockchain data tells a more nuanced story.
According to Glassnode, older Bitcoin holders taking profits during late-stage bull cycles is normal behavior. Rather than signaling a widespread exit, the selling is more aligned with routine profit-taking after strong multi-month rallies.
“This steady rise reflects increasing distribution pressure from older investor cohorts,” analysts explained. They added that this pattern aligns with historical late-cycle behavior rather than a sudden surge in whale liquidation.
While this selling does not necessarily signal a long-term bearish trend, it does reduce upward momentum — especially when combined with broader macroeconomic uncertainty.
Altcoins Also Take a Hit as Market Turns Defensive
Bitcoin wasn’t alone in its weekend sell-off. The wider crypto market saw significant declines, with major altcoins facing even sharper pullbacks.
-
Ether (ETH) is down nearly 8% from the start of 2025.
-
Solana (SOL) has fallen more than 28% in the same period.
-
Many mid- and small-cap tokens have suffered deeper corrections as traders rotate into safer assets.
Despite growing regulatory clarity and stronger institutional support, crypto markets appear to be responding more closely to traditional macroeconomic indicators than in previous cycles. Investors have become more cautious in the face of geopolitical tensions, shifting economic policies, and uncertainty in risk-driven sectors.
Four-Year Cycle Thesis Under Question — But Some Remain Confident
Historically, Bitcoin has followed a four-year cycle shaped by its halving events. In previous cycles, these halvings triggered major bull markets that eventually cooled into bear phases. But with increased institutional involvement, many analysts have questioned whether the traditional cycle still applies.
Some experts argue that Bitcoin’s price behavior now aligns more closely with global economic conditions than with predictable halving-based patterns.
Bitwise Chief Investment Officer Matt Hougan believes that while this year’s turbulence has challenged cycle expectations, the next major uptrend could still be ahead. He predicts a strong 2026 driven by what he calls the “debasement trade” — a thesis suggesting investors will seek assets like Bitcoin to hedge against rising monetary inflation.
Hougan also notes that long-term momentum remains strong due to expanding use cases across stablecoins, tokenization, and decentralized finance. These sectors are expected to play a significant role in shaping the next market cycle.
Outlook: Market Weakness or Temporary Reset?
While Bitcoin’s temporary drop below its yearly starting point signals short-term weakness, many analysts maintain a positive long-term view. The fundamentals — increased institutional ownership, regulatory progress, rising corporate adoption, and expanding blockchain infrastructure — continue to strengthen.
Short-term volatility remains a hallmark of crypto, but the broader structural trends appear intact. Whether Bitcoin quickly regains upward momentum or spends more time consolidating will depend on macroeconomic developments, ETF flows, and the behavior of long-term holders in the coming weeks.
