Bitcoin wipes out 2025 gains: Is it the right time to buy?

Bitcoin, the world’s largest cryptocurrency, plunged below the critical $90,000 mark on Tuesday, trading around $89,896 at the time of writing, its lowest level since February. This sharp downturn has wiped out all gains for 2025, marking a nearly 30 per cent decline from its October peak of $126,000. The move has rattled markets and reignited debates about whether this is a temporary correction or the start of a deeper bear cycle.

Why did bitcoin crash?

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Several factors have converged to push Bitcoin into this steep correction:

1. Macroeconomic uncertainty: Hopes for a December Federal Reserve rate cut have faded, with odds dropping below 50 per cent. A hawkish Fed stance, combined with lingering effects of the 43-day US government shutdown, has tightened liquidity and dampened risk appetite. “Investors shouldn’t underestimate the impact of the Fed’s increasingly hawkish stance,” warned Henry Allen of Deutsche Bank.

2. Institutional outflows and ETF redemptions: Bitcoin ETFs, once a major source of inflows, have seen relentless selling. Over $2.5 billion has exited US spot ETFs this month, including $900 million from BlackRock products. “Large allocators are trimming positions after Bitcoin’s big yearly move,” said Maja Vujinovic, CEO of FG Nexus.

3. Mt. Gox transfers: Adding to the panic, defunct exchange Mt. Gox moved over 10,600 BTC worth $950 million to new wallets and Kraken, sparking fears of creditor liquidations. Analysts warn this could push Bitcoin toward its realized price of $56,000 if selling accelerates.

4. Technical breakdown and liquidations: Bitcoin’s failure to hold above $92,000 triggered cascading liquidations of leveraged positions, totaling over $1 billion in 24 hours. The breach of psychological support at $90,000 amplified panic selling among retail traders.

Is this the right time to buy?

Opinions are sharply divided. Bulls argue that Bitcoin’s fundamentals remain strong, and this correction could be a rare buying opportunity. “This is the last chance to buy Bitcoin below $90K,” said Cameron Winklevoss, co-founder of Gemini. Others urge caution, noting that technical indicators point to further downside if support at $88,000 fails. “Patience is key—wait for stabilisation before deploying fresh capital,” advised Raoul Pal of Real Vision. For long-term investors, dollar-cost averaging may be a prudent approach, but short-term traders should brace for volatility.

Ryan Lee, Chief Analyst at Bitget, said: “We view the recent Bitcoin death cross, where the 50-day SMA crossed below the 200-day SMA, as a bearish technical signal with historically mixed outcomes. While this pattern sometimes marks local bottoms followed by short-term rebounds, it has also preceded deeper corrections during extended bear phases.”

Expert outlook for 2025

Despite the gloom, some experts remain cautiously optimistic. Raoul Pal sees a “liquidity flood” in coming months as global fiscal stimulus and U.S. Treasury spending resume, potentially lifting crypto markets. However, technical analysts warn that failure to reclaim $93,000 soon could open the door to deeper declines toward $86,000–$88,000. Long-term projections remain bullish, with some forecasts still targeting $150,000–$200,000 by late 2025, driven by institutional adoption and post-halving dynamics.

In the current environment, defined by stabilizing liquidity, returning institutional flows, and waning expectations for a December rate cut (now near 50 per cent odds) traders should remain cautious. Added pressure from reports such as Tom Lee’s warning about two major market makers facing financial deficits and lingering systemic risks suggests the market’s risk-off tone may persist in the near term.

“This backdrop could prompt more defensive positioning, including strategic hedging or spot accumulation on platforms like Bitget, as investors seek to navigate potential volatility while positioning for medium-term recovery. We expect BTC to trade between $90,000 and $110,000 in the short term, with ETH likely consolidating between $3,000 and $3,600 through November, assuming no major breakdowns occur,” said Lee.

Somshankar Bandyopadhyay

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somshankar@khaleejtimes.com

Somshankar Bandyopadhyay is a News Editor with close to three decades of experience. Currently, he manages the business section, ensuring that the top economic and business news of the day reaches its readers.