The crypto sector is experiencing one of its most severe downturns of the year, with Bitcoin collapsing to levels that technically qualify as a bear market.
- Bitcoin has entered bear-market territory after erasing all 2025 gains.
- More than $800M in leveraged positions were liquidated and $2B exited digital-asset products.
- Analysts link the downturn to weak inflows, macroeconomic pressure, derivatives liquidations, and tech-sector de-risking.
The move has wiped out all gains accumulated since the start of 2025 and has now sparked concerns across both retail and institutional segments of the market.
Instead of a gradual decline, the sell-off has unfolded through aggressive forced selling. More than $800 million in leveraged positions have been liquidated, according to market trackers, and approximately $2 billion exited digital-asset investment products in the same window — signaling risk reduction rather than rotation.
Market Analysts Flag Structural Instability
The latest pullback was examined during a macro-economics roundtable published on The Wolf of All Streets YouTube channel, where market strategists assessed whether the current breakdown is isolated to crypto or part of a wider deterioration in risk assets.
Participants noted that the volatility profile mirrors the early stages of previous major crash events, where derivatives-driven liquidations accelerated downturns faster than sentiment alone could justify.
What’s Driving the Decline
Experts point to four interconnected factors amplifying the downturn:
- Fresh capital entering crypto markets has slowed noticeably.
- Macro uncertainty — including global economic stress and central-bank policy risks — is weighing on investor appetite.
- Derivatives markets show high forced-liquidation pressure, influencing spot price action.
- Ongoing insider selling in the tech sector is pushing institutions to de-risk broadly, not only in crypto.
A Turning Point Rather Than a Dip?
According to commentary during the broadcast, the recent correction does not resemble the typical “shakeout” behavior seen within bull markets. Instead, strategists argued that the sector may have already shifted into a sustained downward phase, with Bitcoin leading the move as investors reduce exposure to high-volatility assets.
One of the strategists warned that if macro conditions do not improve, the current risk environment could continue to deteriorate in a pattern similar to historical market cascades.
Outlook
The combination of declining inflows, persistent macro uncertainty, and heavy derivatives liquidations suggests that markets may remain unstable in the near term. Analysts say a reversal will likely require either a significant change in macro sentiment or a meaningful return of capital to digital-asset products.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
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Source: https://coindoo.com/strategists-see-risk-of-extended-downturn-after-bitcoin-bear-market-drop/
