The cryptocurrency market is experiencing a sharp decline that’s caught even seasoned traders off guard. Bitcoin has hit a six-month low in its third consecutive weekly loss, dropping below the $90,000 mark and wiping out all gains made earlier this year. What’s particularly striking is the scale of this downturn—the crypto market has lost over $1 trillion in value since October.
This isn’t just affecting Bitcoin. Several altcoins and tokens have fallen 20-30% from their 2025 highs, sending ripples across the entire digital asset ecosystem. The decline has prompted investors to rush for protection, with the options market revealing an unusually bearish sentiment.
The Fear Index Tells a Concerning Story
Looking at market sentiment indicators, the picture becomes even clearer. The Crypto Fear Index, which measures market sentiment on a scale from zero to 100, has plummeted to just 10—a level not seen in over three and a half years. This extreme fear suggests two potential scenarios according to market analysts: either the market has reached its bottom, or it’s rapidly approaching it.
The options market data from Deribit, owned by Coinbase, shows traders have turned heavily bearish. Over $740 million in bearish contracts betting on further Bitcoin declines have been purchased for late November expiry. The shift in sentiment happened remarkably fast.
Beyond Bitcoin: The Broader Crypto Collapse
Ethereum has taken a particularly hard hit, down nearly 40% from its August peak of over $4,955, now trading around $2,997. The damage extends beyond just the coins themselves. Crypto-linked companies like miners, wallet platforms such as Mara Holdings, and even major exchanges like Coinbase are seeing their stocks drop as overall market sentiment turns negative.
The total crypto market cap has dropped to $3.3 trillion, down from this year’s peak of $4.3 trillion. That’s nearly $1 trillion wiped out from the market—a staggering amount of value destruction in a relatively short period.
Understanding the Selling Pressure
The data reveals something crucial: In the last 40-45 days, nearly 850,000 bitcoins have been sold. This represents the highest selling pressure the market has seen since January 2024. The question becomes: who’s selling, and why now?
A broader risk-off mood is adding pressure on crypto. Big investors, corporate treasuries, long-term holders, and even ETF allocators have been pulling out money, leading to fresh redemptions across the entire crypto market. This isn’t retail panic selling—it’s institutional repositioning.
Bitcoin goes through halving events once every four years, and 2024 was the latest halving year. Markets had already expected investors to book profits in 2025, and that’s exactly what we’re seeing this quarter. The timing aligns with typical post-halving cycle patterns, though the intensity has surprised many.
What’s Driving This Downturn?
Analysts point to uncertainty surrounding future US interest rate cuts and a broader market slowdown after an extended rally as key drivers behind the decline. Joshua Chu, co-chair of the Hong Kong Web3 Association, explained that the cascading sell-off was amplified by listed companies and institutions exiting their positions after piling in during the rally, compounding contagion risk across the market.
The pattern is clear: as market support weakens and macroeconomic uncertainty intensifies, investor confidence deteriorates rapidly. That’s precisely what we’re witnessing now.
According to recent Bloomberg reports, traders are seeking more downside protection, with demand rising for options at $90,000, $85,000, and even $80,000. This suggests the market is bracing for potentially further declines.
The Corporate Treasury Problem
The biggest hit has come for companies known as digital asset treasuries. These firms bought huge amounts of crypto earlier this year expecting prices to keep rising. Many of them are now under pressure to sell just to protect their balance sheets. That created a psychological burden across the market—a lot of investors are stuck, sitting on big losses, but not ready to sell at a loss.
The market has been shaky ever since a major liquidation wave in early October wiped out nearly $19 billion worth of digital assets. Open interest in crypto futures has also dropped sharply, especially in smaller tokens like Solana, where positions have fallen by more than half according to CoinGlass data.
Navigating the Current Market Environment
The current environment presents a classic risk management challenge. The extreme fear reading historically has preceded market bottoms, but timing remains uncertain. The institutional selling pressure suggests this isn’t a quick correction but rather a more fundamental repricing of risk in the crypto market.
For those holding positions, the data indicates we’re in a period where patience will be tested. The $90,000 level for Bitcoin has become a critical psychological threshold, and further breaks below this could trigger additional selling pressure as stop-losses are hit.
Key Levels to Watch
The market is now watching several critical support levels. For Bitcoin, the $85,000 and $80,000 marks have become focal points based on options activity. The question isn’t just whether Bitcoin will stabilize, but whether the broader crypto ecosystem can find footing amid institutional repositioning and macro uncertainty.
What remains clear is that the easy gains of 2024’s post-halving rally have been fully reversed. The market is now in a new phase—one that will likely test the resolve of both retail and institutional holders alike. Whether this represents a buying opportunity or further pain ahead depends largely on how macro conditions evolve and whether selling pressure from corporate treasuries begins to ease.