The cryptocurrency market extended its decline into a second month on Thursday. Bitcoin led the downturn by falling below a critical psychological threshold. The dominant digital asset dropped more than 4% to trade below $87,000 for the first time since April. This erased the momentum that had fueled its record run earlier this year.
This sustained pullback contrasts with the trajectory of traditional stocks. These stocks surrendered their own gains after a brief rally driven by positive results from AI chipmaker Nvidia. The divergence highlights the unique pressures facing the crypto market. It remains trapped in what analysts describe as a self-contained purge of leverage and fading retail demand.
According to James Butterfill, Head of Research at CoinShares, the downturn is being driven significantly by large-scale investors. “Crypto is suffering from heavy selling by whales who follow the four-year cycle narrative. This is typically the point in that cycle where prices fall,” he stated.
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Butterfill noted that while his firm doesn’t necessarily subscribe to this view on fundamentals, it has become a self-fulfilling prophecy. He reported that these large holders have sold more than $20 billion in cryptocurrency since September. This has created substantial downward pressure on prices.
The current market fragility is also a direct consequence of a violent liquidation event in October. During a single session, over $19 billion in leveraged crypto positions were forcibly closed. This triggered a chain reaction that broke the market’s upward momentum.
This event severely hollowed out liquidity across major trading venues. Order books have never fully recovered, leaving prices hypersensitive to even modest selling or buying pressure. This underlying fragility continues to define and amplify every downward move. As a result, the market remains vulnerable to further declines as it struggles to attract new buyers.