Can bitcoin bounce back from its latest slump?

A little over a month after bitcoin touched a record high, the cryptocurrency is under pressure and the latest fall has wiped off all of its 2025 gains. How quickly things change.

In October, cryptocurrency backers were celebrating as bitcoin touched a lifetime high of over $126,000. On November 18, bitcoin briefly fell below $90,000 before recovering to around $91,000 on November 19.

The world’s largest cryptocurrency has now declined close to 28 per cent, also putting pressure on other cryptocurrencies. Ethereum, for instance, is down 21 per cent year to date and Solana has dropped 26 per cent.

Bitcoin was soaring in October, backed by strong institutional flows. The US government shutdown last month had added in to the economic uncertainties, amid the ongoing geopolitical and tariff-related concerns. US Federal Reserve was also expected to slash interest rates further, which was also fuelling demand for bitcoin as a hedge against the uncertainty and pressure on currencies. All that seems to be unwinding now.

Ashish Singhal, co-founder of CoinSwitch, attributes the correction to a mix of macro uncertainty and market factors.

“The biggest factor is fading expectation of near-term Fed rate cuts, which have reduced overall risk appetite. Weakness in equity markets, especially around the AI bubble, has spilled over into crypto as well. Large holders who benefited from the recent run-up are also booking profits, adding more supply to the market,” he said.

US bitcoin exchange traded funds have seen outflows in excess of a $1 billion this month. Ethereum ETFs too have seen outflows.

The Fed cut its target rate by 25 bps in October, but, analysts say its becoming increasingly difficult to predict if there will be another cut in December. While some believe, Fed should cut rates to support a weak jobs market. But, others believe rates may be held higher for longer to tame inflation.

While bitcoin has bounced back after slipping below $90,000, there may not be any major upside any soon, say market watchers.

“I don’t anticipate dramatic upside in the near-term, but I do expect a more stable, orderly market,” said Singhal.

The key thing to watch for now would be bitcoin’s psychological support at $90,000, he noted. Investors should keep an eye on the broader macro signals, if there are any indications that the Federal Reserve may shift stance and how large holders and institutional investors are adjusting their positions, he added.

This is not the first time that bitcoin has fallen this sharply. There have been instances in the past where the cryptocurrency has fallen sharply, wiping off a large portion of its value, but then going on to recover impressively. Its still trading well above the levels it was before Donald Trump was elected the US President.

The recent downturn is far from unusual and doesn’t signal a breakdown in bitcoin’s long-term story, said Raj Karkara, chief operating officer of crypto exchange ZebPay.

“After strong price advances, its common to see investors lock in profits, particularly during periods of global uncertainty and shifting monetary conditions. Short-term ETF withdrawals and lower trading volumes often reflect caution rather than loss of faith, and such phases have historically laid the groundwork, for stronger and more sustainable growth ahead,” he said.

Bitcoin’s core strengths, including its limited supply and rising institutional participation, remain firmly in place, he pointed.

For long, gold has been the go-to safe haven asset in uncertain times. Many crypto backers had believed bitcoin will be the new gold. However, its significantly lagging gold, with the precious metal up 60 per cent this year. All eyes will now be on how and when bitcoin bounces back from its latest slump.