Just hours after dipping below $90,000 for the first time in seven months on Tuesday, Bitcoin turned a corner, climbing toward $94,000. On Wednesday, Bitcoin dipped to $88,500 – the third test of this level this week – but quickly reclaimed $91,500, prompting analysts to question if $89k was the bottom, signaling a shift in the conversation.
Earlier in the week, it was safe to say cryptocurrency was in a bear market. However, the quick reversals point to a trend that could help digital assets recoup the $1.2 trillion in market value they erased over the past month and a half.
Before Bitcoin's gains, bets were rising for the token's freefall to below $80,000 by the end of this year. The demand for downside protection for Bitcoin at the $85,000 and $80,000 levels had surged.
While the top token is around where it was the same time last year, about $5 billion has been liquidated from the crypto market over the past week.
Bitcoin is still down about 25% since hitting a record high of $125,500 in October.
A New All-Time High?
Still, despite the steep sell-off, the 28% correction before the pullback was mild compared to previous cycles. Bitcoin dropped 83% in 2018 and 73% in 2022 before hitting new highs.
Since 2017, Bitcoin has seen over 10 declines of 25% or more, six declines of 50% or more, and three declines of 75% or more, before recovering to new record highs.
But the difference now is that institutions own Bitcoin through ETFs, which has changed how crashes play out.
More importantly, the fundamentals for the top token are still intact, with the push for wider adoption of Bitcoin successful in traditional markets this year. Every single decline of the current magnitude or more since Bitcoin's inception has been followed by new record highs.
Where Capital is Leaning Next
Observers say sitting tight during flash crashes is not easy, but it pays when you can filter out the noise. This is a routine crypto bear market, which analysts believe is already closer to its end than its beginning. The late move to green supports that argument.
Investors say volatility brings opportunity, especially in the crypto market, and the recovery suggests more upside rather than any significant downside. Even if one looks at the lowest level for Bitcoin in each year since its inception, 2025's weakest level of $74,524 is nearly double that of last year's low.
Gold is the best-performing major asset in 2025, with an over 54% gain, while Bitcoin is now the worst, with a marginal loss for the year. That is something we haven't seen before in any calendar year, and the inverse of what happened in 2013.
Also, since the first Bitcoin exchange-traded funds (ETFs) were launched in January 2024, gold has now surpassed Bitcoin in performance.
Still, Bitcoin above $90,000 is a clear endorsement of a change in the crypto's fortunes when compared to a low of about 3 cents in 2011 and $16,500 just two years ago.
But more importantly, if Bitcoin's yearly moves are looked at, the magnitude of the fall has been well below the proportion of gains.
Risks Still at Play
Yet despite Bitcoin’s rebound above $90,000, downside risks remain substantial. Prediction markets on Kalshi show traders still giving meaningful probability to a drop toward $82,000, reflecting concerns that October’s flash crash did not fully flush out leveraged excesses. Liquidity conditions across crypto remain fragile, with derivatives funding rates swinging sharply negative and spot volumes failing to match the scale of the recovery rally.
Macro pressures also linger. Treasury yields remain elevated, tightening financial conditions globally, and risk assets continue to trade in a higher-volatility regime. Inflows into Bitcoin ETFs – one of the key catalysts for this year’s rally – have slowed noticeably since mid-September, suggesting that institutional demand has not yet returned in force.
At the same time, miners are facing tightening margins post-halving, which could increase sell pressure if prices stall below the mid-$90,000 range. Analysts also warn that the options market is still skewed toward protective puts at $85,000 and $80,000, pointing to lingering fear of a deeper retracement.
The next move will depend on whether liquidity stabilizes, and whether ETF flows and institutional buyers step back in before volatility resurfaces.
Elsewhere
Blockcast
Kaia's Path to Mass Adoption: Blockchain in Everyday Apps
This week, Takatoshi Shibayama hosts Dr Sangmin "Sam" Seo and John Cho from the Kaia DLT Foundation . They discuss the merger of Kakao and Line to create the Kaia blockchain, the integration of stablecoins and DeFi into their messaging apps, and the strategies for attracting Web2 users to Web3. The conversation also covers the potential of stablecoins in cross-border remittance and the user journey from fiat to digital assets.
Thanks for tuning in! If you enjoyed this episode, please like and subscribe to Blockcast on your favorite podcast platforms like Spotify and Apple .
Blockhead is a media partner for Consensus Hong Kong 2026. Readers can save 20% on tickets using exclusive code BLOCKDESK at this link .
