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10.12.202500:53 Forex Analysis & Reviews: Bitcoin Ends 2025 in the Red for the First Time in Three Years

Relevance up to 10:00 UTC--5

Exchange Rates 10.12.2025 analysis

The cryptocurrency market is ending 2025 on a troubling note: as of Monday, the price of Bitcoin has dropped to $90,600, which is 10.5% lower than the values at the end of the previous year. This marks the first annual decline for the leading digital currency since 2022, signaling a trend reversal after impressive highs at the beginning of the year.

In October, Bitcoin surged above $126,000, setting a new all-time high. However, subsequent geopolitical events and macroeconomic upheavals drastically changed the trading landscape.

A turning point occurred on October 10 when U.S. President Donald Trump announced a 100% tariff on Chinese goods and threatened to impose export controls on critical software products. These statements undermined investor confidence and triggered a massive liquidation of leveraged positions in the cryptocurrency market: within a day, positions worth over $19 billion were liquidated—marking the largest single-day collapse of leveraged positions in history. In just one day, Bitcoin plummeted from $122,000 to less than $105,000, losing 14% of its value.

Throughout 2025, Bitcoin increasingly began to "correlate" with the traditional stock market. According to fresh data from LSEG, the correlation between Bitcoin and the S&P 500 index reached 0.5 (up from 0.29 in 2024), and with the tech-heavy Nasdaq 100, it climbed to 0.52 (up from last year's 0.23). This indicates that the cryptocurrency is responding more frequently to movements in stock indices, rising or falling in unison with them.

Exchange Rates 10.12.2025 analysis

"The relationship between the cryptocurrency market and stock indices has been pronounced throughout the year," noted Jasper De Maere, a strategist at crypto firm Wintermute. He added that this is the first instance since 2014 in which Bitcoin has shown negative dynamics even as the S&P 500 rises.

Particularly sensitive was the influence of fluctuations in the stock market of companies working with artificial intelligence—an industry that investors consider high-risk and speculative. "The cryptocurrency felt pressure after October 10, and amid uncertainties surrounding AI prospects, the market began to oscillate," stated Cosmo Jiang, general partner at Pantera Capital.

The flight of institutional investors has not helped either: in November, U.S. spot Bitcoin ETFs recorded a record monthly outflow of $3.79 billion. The leader in outflows was the iShares Bitcoin Trust from BlackRock, which saw investors parting with $2.34 billion—surpassing the previous anti-record from February ($3.56 billion).

Nevertheless, some major players continue to bet on Bitcoin. Michael Saylor, Executive Chairman of MicroStrategy, once again expressed confidence in the digital asset: his company acquired an additional 10,624 tokens for $963 million, increasing its holdings to an impressive 660,624 BTC. In a conversation with Reuters, he emphasized: "Our strategy will withstand even a 95% drop in the price of Bitcoin."

Now, market participants' attention is focused on the upcoming Fed meeting. The probability of a 25-basis-point rate cut is estimated at 87%. According to analysts, this decision will play a key role in determining the future dynamics of cryptocurrencies. Along with news from the AI market, the central bank's actions will be key drivers of Bitcoin's behavior at the start of 2026.

For traders, current events signal that it is time for strategic flexibility. The growing correlation between cryptocurrencies and traditional indices (S&P 500 and Nasdaq 100) creates opportunities for arbitrage and cross-asset diversification.

Furthermore, high volatility during major economic announcements (such as Fed rhetoric or geopolitical events) provides the chance to profit from short-term fluctuations. Those following Michael Saylor's example might view pullbacks as opportunities to increase long-term investments in the largest cryptocurrency at reduced prices.

Andreeva Natalya,
Analytical expert of InstaSpot
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