Bitcoin

Published on
02/12/2025 – 14:13 GMT+1

A broad-based crypto sell-off accelerated this week, wiping billions off the total market capitalisation and stoking fresh concerns about financial contagion both within the digital asset ecosystem and across adjacent markets.

Bitcoin slipped to about $84,000 (€72,328) during Monday trading before rebounding to near $87,000 later in the day. The cryptocurrency saw more dramatic lows earlier in November, despite a brief consolidation at the end of the month that pushed it over $90,000 — still well below the roughly $100,000 level it was trading at in early November and much lower than the October high of around $125,000.

The downturn has hit other major cryptocurrencies — known as altcoins — as well, with Ethereum trading at around $2,800 — a roughly 7% drop from $3,000 a week ago, and a steep fall from the near $4,800 levels seen in August.

As of early December 2025, the Crypto Fear & Greed Index — a widely followed gauge of crypto investor sentiment inspired by CNN’s Fear and Greed Index on other US stocks — remains in the “Extreme Fear” territory with a reading of 23/100, underscoring deep pessimism across the crypto market.

These indices reflect a composite snapshot of market mood, calculated daily by combining signals from six key metrics — including volatility, trading momentum and volume, social-media sentiment, coin dominance and Google search trends.

Crypto champions struggle to stay optimistic

For much of this year, crypto investors had grown almost defiant in the face of repeated warnings that the Bitcoin bubble was due to burst, especially when each dip was followed by an even stronger rebound.

In March and April, Bitcoin saw sharp declines before returning to record-breaking highs of $120,000 (€103,394) in August and October.

The election of Donald Trump fuelled the belief that crypto’s momentum was politically protected — somewhat ironic for a digital currency originally invented to escape government-driven monetary systems. Confidence in the coins rose after Trump signed the GENIUS Act, the first US federal stablecoin regulation law, a move widely hailed as legitimising key parts of the crypto ecosystem.

But that confidence seemed to have evaporated in November, when a sharp reversal in Bitcoin’s fortunes began.

Strategy Inc, the world’s largest corporate holder of Bitcoin, moved on Monday to reassure investors rattled by December’s steep sell-off and announced a $1.44 billion (€1.24bn) cash reserve to help stabilise its balance sheet.

The company said the new US dollar reserve — funded through recent stock sales — will cover at least 12 months of dividend and interest payments, with the aim of eventually holding enough to cover 24 months.

“Establishing a USD Reserve to complement our BTC reserve marks the next step in our evolution, and we believe it will better position us to navigate short-term market volatility while delivering on our vision of being the world’s leading issuer of digital credit,” Michael Saylor, the founder and executive chairman of Strategy, said in a statement.

The announcement comes as Strategy quietly walks back its own earlier assumptions about Bitcoin’s trajectory, shifting its earlier earnings guidance for 2025 from an end-year Bitcoin price of $150,000 and lowering its price expectation to a more modest range of $85,000 to $110,000.

Global stocks rose on Thursday after strong Nvidia results eased concerns of a market crash, linked to the perceived overvaluation of AI firms.

Bitcoin, the world’s most established cryptocurrency, also enjoyed a modest lift — rising 0.73% by early afternoon in Europe.

This comes after a hard few months for the token. On Monday it briefly slipped below the $90,000 mark for the first time in seven months before rising to around $91,800 on Thursday.

A turning point in crypto’s trajectory can be traced back to 10 October, when a meltdown wiped out more than $1 trillion in market value across all tokens. More than $19 billion of leveraged crypto positions were offloaded, notably after US President Donald Trump threatened new tariffs on China.

“There have been several catalysts (of the recent price drop), but it seems as if the biggest drivers are long-term selling by ‘OGs’, an uncertain economic climate, and a mass deleveraging event on the 10th October,” Nic Puckrin, CEO of Coin Bureau, told Euronews.

“OGs are the term used to describe older Bitcoin holders with massive amounts of Bitcoin. They have been selling for several weeks which has led to a flood of supply hitting the market,” he added.

Analysts note that the US economy is in a period of deep uncertainty at the moment, partly as a government shutdown has prevented the publication of key data releases, with the uncertainty driving crypto lower.

The outcome of the Federal Reserve’s next interest rate decision, due in December, is hanging in the balance — with investors now paring back expectations of a cut.

Transcripts released this week from the Fed’s October meeting show the policy-setting committee deeply divided over whether to reduce the benchmark interest rate.

“Bitcoin is increasingly driven by macro moves,” Puckrin argued.

Analysts fear that as crypto grows more interconnected with mainstream financial markets, contagion will make both crypto assets and stock markets more volatile.

‘A football match with no referee’

Bitcoin reached its price high in October thanks to increased institutional acceptance, expectations of Fed rate cuts, and support from the Trump administration.

For Carol Alexander, crypto expert and finance professor at Sussex University, Bitcoin’s volatility must nonetheless be associated with aggressive trading techniques — rather than simply pointing to the macro environment.

“Bitcoin’s price is determined primarily by the behaviour of professional traders operating on offshore, unregulated trading platforms. These are not hobbyist investors; they are major hedge funds and specialised trading firms,” she told Euronews.

“On these offshore crypto exchanges, professional traders can deploy aggressive order-book strategies — sometimes labelled spoofing or laddering … Their business model relies on generating sharp volatility. They do not care whether the price rises or falls; they care only that it moves quickly.”

In other words, these traders make money from price swings by buying in the dip and selling when crypto rebounds, meaning they aren’t focused on long-term holdings.

The losers in this scenario are often non-professional traders, who can sometimes take on enormous leverage — borrowing money to increase the size of their investments. When the market moves against these investors, they are often forced to sell, losing everything.

“When too many of these non-professional traders have been wiped out, liquidity dries up, and the pros step back,” said Alexander. “At that point, the price often rebounds sharply, encouraging new entrants to join. The whole system behaves like a football match played in a stadium with no referee.”

Puckrin also predicted that crypto is set for a rebound, forecasting that it won’t fall much below current levels.

“I still think it’s a bright future despite the price action. Crypto has been through multiple cycles and it always emerges stronger. We are also seeing the mainstreaming and institutionalisation of the industry. This means more people can use the technology in their daily lives.”