Bitcoin reached a record high in October 2025, surpassing $126,200, but shortly after, its price fell by about 30% and remained mostly within the $83,000–$96,000 range for the past two months. The key event was the October 10 flash crash, which triggered a liquidity shock in the market and sharply reduced leveraged long positions. At the same time, the market’s nature changed: institutional flows and liquidity policies now have a stronger influence on BTC’s behavior.
Reasons for Bitcoin’s Decline in 2025
October 10 Flash Crash. This drop was not a systemic network failure but a liquidity event: a combination of macro stress, fears related to trade wars, and overloaded positions led to cascading liquidations and a sharp price decline.
Impact of Macroeconomic Factors and Fed Policy. The market entered the year expecting rapid monetary easing, but these expectations did not materialize, reducing appetite for risky assets and increasing Bitcoin’s correlation with traditional markets.
Role of Institutional Investors and ETFs. Before October, U.S. spot ETFs attracted about $9.2 billion in net inflows, but from October to December, outflows exceeded $1.3 billion, increasing downward pressure on price and revealing the market’s vulnerability to large capital flows.
Changing Role of Bitcoin in the Market
With the influx of institutional capital, Bitcoin ceased to be solely an ideological or purely retail asset and became part of the institutional macro complex. It is increasingly evaluated through the lens of liquidity, positioning, and central bank policies rather than just belief in its long-term value.
This means market responses now depend on the same factors as other risk assets: rate expectations, ETF flows, and geopolitical uncertainty. The shift in trading behavior complicates forecasting, as discussed in detail in the 2025 forecasts materials.
Bitcoin Outlook for 2026
Despite the yearly pause and sharp negative episodes, some experts still expect growth next year. Matt Hougan from Bitwise believes new all-time highs are possible in 2026, even outside the traditional halving cycle.
Growth drivers in the foreseeable future include institutional flows, a clearer regulatory environment, and structural factors that act more slowly but steadily. Additional thoughts on possible scenarios for next year can be found in the 2026 forecast review.
Why This Matters
If you mine in Russia with 1–1000 devices, price drops and volatility directly affect ruble revenue from coin sales: with the same mining output, a lower price reduces profitability. Moreover, events like the October flash crash show that sharp moves can occur within minutes and be amplified by cascading liquidations, increasing risks in short-term selling.
The institutionalization factor is also important: large inflows and outflows from ETFs can shift market direction faster than local mining fundamentals. For you, this means that besides controlling electricity costs, it makes sense to monitor flows into institutional products and the overall macro environment.
What to Do?
Monitor Liquidity and ETF Flows. Outflows and inflows impact price more than before, so tracking large capital movements will help make timely decisions on selling or accumulating.
Manage Risk and Leverage. If you trade with borrowed funds, remember the risk of cascading liquidations during high volatility periods, especially on weekends when large flows usually pause.
Optimize Operating Costs. With falling or volatile prices, electricity costs and equipment efficiency remain key, so review tariffs and farm operating modes.
Think Structurally. If you focus on long-term income, consider that institutionalization makes the market more dependent on macro conditions; plan strategies for various price movement scenarios.