Basic Reason of Bitcoin Downfall and How Much downfall will come in BTC

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The current market correction has been one of the sharpest crypto downturns in recent years. Bitcoin (BTC) has lost roughly 50% of its value from its October 2025 all-time high of $126,200, tumbling down to the $61,000–$63,000 range.
​The primary catalysts driving this downfall—and the consensus on how much further it could slide—are outlined below.

​Why is Bitcoin Falling? (The Core Reasons)

​Unlike the panic-driven collapse of 2022 (which was triggered by internal crypto insolvencies like FTX and Terra), the current correction is primarily a macro liquidity and demand-side event.
​Capital Flight to AI Stocks and Mega-IPOs
The massive AI-driven stock bull run has pulled intense amounts of institutional risk capital away from crypto. Furthermore, a wave of highly anticipated mega-IPOs (such as SpaceX, OpenAI, and Anthropic) has caused investors to liquidate crypto holdings to hoard cash for these new listings.
​The Reversal of Spot ETF Inflows
The major engine behind the 2024–2025 rally was aggressive buying from U.S. spot Bitcoin ETFs. In recent months, that trend completely flipped. Capital has been aggressively exiting these ETFs, with Bitcoin’s Realized Cap shrinking by nearly $40 billion, indicating a massive institutional exit.
​Macro Headwinds and Delayed Fed Rate Cuts
Geopolitical tensions (specifically the U.S.–Iran conflict) have triggered sticky inflation concerns. Consequently, the Federal Reserve has stalled its planned rate cuts, keeping interest rates higher for longer. A strong U.S. dollar and high yields make speculative assets like Bitcoin less attractive.
​Corporate Sell Rumors ("Strategy" Sale)
Market sentiment took a severe hit following data and rumors that major corporate holders (specifically MicroStrategy or "Strategy") executed a Bitcoin sale for the first time in four years, causing a massive flush in the futures market and triggering over $1.35 billion in leveraged long liquidations.
​The Four-Year Cycle is On Schedule
Historically, Bitcoin runs on a rigid 4-year halving cycle. Peaks occurred in late 2013, 2017, 2021, and October 2025. Macro analysts note that a major bottom typically arrives roughly 12 months after the peak. By this mathematical framework, the current downward trend is entirely on schedule.

​How Much Further Will BTC Fall?

​The total crypto market capitalization has already contracted by about 48% to $2.46 trillion. Analysts are looking closely at specific levels to find the bottom:
​The $60,000 Psychological Floor: Bitcoin is currently sitting just above a massive support line at $60,000. On-chain data (including mining rig shutdown prices and the Relative Strength Index) shows that BTC is severely oversold. Many analysts believe a catastrophic drop below $60,000 is unlikely to sustain, though brief wicked retests of the $58,000–$60,000 area could happen to flush out remaining leverage.
​The Q4 Window Bottom: According to historical data, if the 4-year cycle holds perfectly, the absolute bottom/trough for this cycle will form sometime in the fourth quarter (Q4).
​A "Shallower" Bear Market: While previous crypto crashes wiped out 78% to 84% of Bitcoin’s value, experts expect this crash to be shallower because the core "plumbing" of the market isn’t broken by fraud or bankruptcy. Once the macro pressures ease and the capital from tech IPO lockups begins to recycle back into higher-risk assets, a swift recovery is expected.
​Disclaimer

This article is just for educational purpose.