Bitcoin has officially erased its 2025 gains, plunging to $90,000 for the first time in seven months and cementing its entry into a full-blown bear market. After hitting an all-time high of over $126,000 just six weeks ago, the world’s largest crypto asset has tumbled more than 28%, erasing over $600 billion in market value.
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Analysts say this brutal pullback reflects a global retreat from risk. AI stocks, crypto, and other speculative assets have all been hammered as investors grow uneasy over whether the Federal Reserve will deliver a rate cut next month.
Thin liquidity, stemming from the October 10 flash crash, triggered by President Donald Trump’s reignited trade war with China, has only amplified the volatility.
BTC's price trends to the downside on the daily chart. Source: BTCUSD on Tradingview
Bitcoin Institutional Activity and Market Trend
Institutional outflows haven’t helped either. U.S. spot Bitcoin ETFs have recorded over $3 billion in net withdrawals in just three weeks, while short-term traders and year-end profit-takers add more downward pressure.
With BTC now hovering around $89,500, sentiment has sunk to “extreme fear,” according to the Fear & Greed Index reading of 11.
Nonetheless, some believe the market is nearing exhaustion. Analysts at Bitwise and BitMine argue that Bitcoin is carving out a bottom, calling current levels a rare opportunity for long-term accumulation.
El Salvador Buys the Dip, Again
As panic grips the market, one player isn’t flinching, El Salvador. President Nayib Bukele announced the country’s largest single-day Bitcoin purchase ever, 1,090 BTC worth roughly $100 million, timed with Bitcoin’s drop below $90,000.
This latest buy pushes El Salvador’s total holdings to approximately 7,474 BTC, now valued at around $670 million. The country has also been purchasing 1 BTC per day since November 2022, accumulating more than 1,098 BTC over the past week alone.
But the move raises eyebrows. Under a $1.4 billion loan agreement with the IMF, El Salvador’s public sector is prohibited from buying Bitcoin. Officials have issued conflicting statements, and the IMF has suggested that some “new purchases” may simply be wallet consolidations. Yet Bukele insists the strategy is ongoing and unstoppable.
Right Bet or Risky Gamble?
While El Salvador continues doubling down, adoption inside the country remains low. Surveys show that most Salvadorans still prefer using the U.S. dollar, despite Bitcoin’s legal tender status. Volatility, technical barriers, and limited merchant uptake have slowed everyday use.
Still, Bukele frames Bitcoin as a long-game strategy, one that could position the nation at the forefront of a digital monetary shift. With sovereign players like the Czech National Bank also dipping into Bitcoin, El Salvador’s bold stance may prove visionary… or dangerously premature.
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For now, Bitcoin sits at a crossroads. Whether this is the start of a deeper reset or a temporary shakeout could define not just the crypto market’s next chapter, but the legacy of the world’s first Bitcoin nation.
Cover image from ChatGPT, BTCUSD chart from Tradingview
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