Since Bitcoin’s all-time high in October, the token’s price has decreased by more than 30%, driven by volatility triggered by external factors. In December, Bitcoin traded below the $90,000 threshold and ranged between $80,000 and $90,000, despite no significant drawdowns or major macroeconomic news. Even so, Bitcoin has been volatile, with the token experiencing sudden intraday price increases. In this article, we analyze recent events, Bitcoin’s valuation, and what’s expected for 2026.
Bitcoin down from its all-time high
After peaking at $126,000 in October, the price declined approximately 36% from its all-time high, dropping to $80,000, a level where it found support and bounced. In late November and early December, Bitcoin traded around $85,461. At the same time, the broader crypto market saw increased volatility, with altcoins losing more than 7% in a single day and the total market cap dropping to $3 trillion.
Despite the severe drop, Bitcoin’s price behavior remains consistent with historical patterns, even with wider cryptocurrency adoption and increased regulation drawing in more institutional investment. During the 2017 cycle, BTC experienced a 40% drawdown on multiple occasions before rallying to a new high. However, the timing seems off in this case, as over the past 14 years, December saw Bitcoin close in the green.
Even though investors attribute the drop to the potential end of the cycle, some analysts dismiss the cycle view and see the correction as a pullback rather than a macro price shift.
Broader market risk-off attitude
The market is seeing a lack of enthusiasm in crypto and risk-on assets. That is also reflected in the recent crypto liquidations, which totaled $1 billion, according to Coinglass data. The market sell-off is also affecting institutions with exposure to Bitcoin and the crypto market. Strategy is considering limiting its Bitcoin exposure as the company’s valuations are inching closer to the break-even point.
It’s not only crypto that’s experiencing a sell-off. According to the director of trading at Monex USA, the tech world as a whole is showing signs of shifting enthusiasm. Tech stocks dropped by 0.40% as the market is expecting a major sell-off amid overvalued pricing in AI companies.
The “Fear and Greed” index for both crypto and traditional markets has dipped into fear territory. Liquidity concerns exacerbate this sentiment. As liquidity dries up—partially due to ETF outflows recorded in November- the market becomes shallower, making it harder to absorb large sell orders without impacting the price. What we’re seeing is a potential reset in investor sentiment or a significant shift in asset allocation and risk-taking.
What has driven Bitcoin’s move
Beyond general sentiment, specific structural events have catalyzed the recent volatility. The $19 billion liquidation in October led to multiple entities facing liquidation and margin calls. The “flush” of leverage forced many traders out of the market, but also changed the investor dynamic since market makers have been identified as a root cause for the large liquidation event.
Macroeconomic factors also contribute to Bitcoin’s volatility. Uncertainty around tariffs and interest rate cuts has led investors to the sidelines, hesitant to fully deploy capital. Furthermore, the Chinese Central Bank’s reiterated ban on cryptocurrencies and stablecoins has impacted market liquidity, as these have been significant drivers of the crypto market.
Potential policy tightening by the Bank of Japan has kept investors cautious, while rumors that MicroStrategy may sell holdings if their valuation dips have added a layer of anxiety to the market, further suppressing bullish momentum.
Is a new all-time high coming in 2026
Despite the market gloom and persistent investor fear, some long-term investors see the current market downturn as an opportunity. Grayscale Research recently released a report challenging the traditional view of Bitcoin’s “four-year cycle,” which dictates that prices peak and crash in rhythm with the halving schedule.
Grayscale argues that this cycle is different because the market structure has fundamentally changed. We are now seeing institutional money concentrated in ETFs and digital asset treasuries rather than just retail speculation. Consequently, Grayscale analysts predict that Bitcoin could potentially hit new all-time highs in 2026, bypassing the deep, multi-year “crypto winter” that usually follows a peak. This sentiment is echoed by other industry leaders, such as BitMine CEO Tom Lee, who notes a disconnect between falling prices and strengthening fundamentals, such as wallet growth and on-chain activity.
Navigating the path ahead
Bitcoin’s volatility and current price serve as a reminder that, despite institutional inflows, crypto markets remain unpredictable. While analyst predictions are rooted in their own analysis and experience, investors should diversify their holdings to capture the potential growth in 2026 or limit their risk. Whether you are an active trader or prefer a managed approach, Yieldfund provides ways to access the crypto market without having to worry about volatility. With a single investment, investors can get up to 60% annual interest with weekly payouts.
