Bitcoin has entered the final phase of the year in an unusual position, as the market watches its potential fourth consecutive annual decline in history. The current development, however, paradoxically did not trigger any major scandal or the collapse of a significant company, as was the case three years ago with the FTX crash.

Bitcoin may close the 4th negative year in history

During the recent sell-off, Bitcoin, according to TradingView, weakened by up to 36% over one and a half months and has lost approximately 8% since the beginning of the year. Unlike in the past, however, the environment does not seem overtly negative this time.

Institutions have entered the market more significantly, regulations have gained clearer outlines, and cryptocurrencies were even supported by US President Donald Trump. Despite this, the price sharply dropped after the historical high above $126,000 in October, surprising investors.

In recent months, Bitcoin has not responded to positive news as the market expected. Trading volumes remain low, capital is flowing out of Bitcoin ETF funds, and derivative markets, according to Coinglass, are not betting on a quick return to growth.

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This year is different

Even repeated purchases by the company Strategy, led by Michael Saylor, failed to restore stronger momentum. The market is also observing the gradual decoupling of Bitcoin from stock indices. While the S&P 500 index reached new highs and gained 16% since the beginning of the year, tech stocks grew even more significantly. Bitcoin, however, moved in the opposite direction.

Previous major Bitcoin crashes always involved events that shook investor confidence. In 2014, the Mt. Gox exchange hack caused the price to drop by 50%. Four years later, in 2018, the ICO bubble burst and Bitcoin lost up to 72%. The year 2022 brought the collapse of major firms including FTX and subsequent regulatory pressure.

This cycle, however, revealed a different issue. Excess leverage had accumulated beneath the surface before the October peak. On October 10, the market saw the liquidation of leveraged positions worth $19 billion, significantly undermining confidence. While the market gained regulation and ETF products, the price did not respond to these stimuli. This picture suggests that caution may prevail in the Bitcoin market in the short term.

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