Bitcoin is on track to record its worst losing streak since 2018, marking a fifth consecutive monthly decline. The cryptocurrency is down nearly 50% from its peak, with analysts divided over the implications.
Mati Greenspan, senior eToro market analyst, suggests the current downturn reflects a broader recalibration of how markets value risk assets amidst heightened uncertainty, calling it a "structural regime shift."
Geopolitical tensions and a strengthening U.S. dollar are tightening financial conditions, impacting risk assets like Bitcoin. Notably, Bitcoin has sharply underperformed U.S. stocks, a departure from its typical correlation.
Jonatan Randin, senior market analyst at PrimeXBT, points to mounting macro pressures, including significant ETF outflows and persistent inflation concerns, which are weighing on Bitcoin. He notes that while gold has attracted safe-haven flows and equities have benefited from AI momentum, Bitcoin has lagged, suggesting investors still view it as a liquidity-sensitive risk asset.
Randin cautions that the correction may not be over, estimating that Bitcoin could be only halfway through a potential drawdown similar to prior bear markets. He identifies $60,000 as a key near-term support level.
Greenspan, however, believes that extreme pessimism may already be priced in, suggesting that sharp reversals can occur when sentiment is uniformly negative and long-term fundamentals remain robust. He emphasizes that the "structural story spans decades."