Bitcoin volatility shakes cryptosphere but exchanges pin hope on investor behaviour
Bitcoin price slipped to about $88,609 on Thursday before paring losses. It was trading at roughly $126,000 a month ago, and the steep fall has created panic in the ecosystem.
For the better part of the year, Bitcoin's value grew staggeringly. Analysts and institutions were largely bullish, forecasting strong growth throughout the remainder of this year, buoyed by the asset touching a fresh all-time high of $126,000 on October 6, 2025. However, the price has now fallen by about 30% in a matter of weeks.
The asset class—popularly referred to as digital gold—was trading at $88,809 on Thursday early morning, before it pared losses and touched $92,244.81 at the time of writing this article, according to CoinMarketCap.
Whispers of an impending correction have been brewing since BTC prices shot up late last year when it passed the $100,000 price stamp for the first time in December, fuelled by the Securities and Exchange Commission’s (SEC) approval of spot Bitcoin ETFs and institutional adoption. However, the market has been rattled by the steep drop in prices, according to experts.
“Bitcoin’s latest drawdown looked dramatic. The asset fell from roughly $126,000 to about $89,000 in forty-two days. The speed created panic, but the size of the move was not unusual. Bitcoin has delivered several 30% corrections in previous cycles. What made this one feel different was the pressure built up over the past year. This was not a collapse from euphoria. It was released after twelve months of stagnation,” noted WazirX’s Trade Desk in a note on Wednesday.
The firm noted that with Bitcoin down nearly 30% from its peak earlier this year, the total crypto market cap has fallen by over $1 trillion in recent weeks, with a 15% decline in price just over the last 30 days.
According to Avinash Shekhar, Co-founder and CEO at crypto futures and options trading platform Pi42, the recent decline can be explained by a combination of factors such as profit booking, broader risk-off behaviour, and persistent outflows from major BTC investment products across the market—all of which have created a temporary imbalance where selling activity has outweighed new inflows.
Despite the selloff, exchanges note that deeper market behaviour remains steady. This refers to those investors who hold Bitcoin for the long term. “On our platform, long-term holders continue to accumulate, and trading volumes show that engagement has not tapered off. This indicates that conviction in Bitcoin’s long-term value proposition remains intact. Historically, similar corrective phases have acted as important resets that help the market absorb excess leverage and prepare for the next phase of stability,” Shekhar noted in a statement.
Experts believe that while the correction takes a difficult toll on traders, it is also expected to reset the market to a healthier base.
“The networks that stay focused on scaling, stable throughput, real-world developer adoption, and transparent execution tend to emerge stronger when volatility settles. Prices will continue to fluctuate, but the ecosystems with active communities, proven security, and clear utility usually move beyond such cycles with renewed momentum,” said Nischal Shetty, Co-founder of decentralised blockchain platform Shardeum.
Edited by Kanishk Singh