After hitting an all-time high near $126,000 in early October 2025, Bitcoin fell to as low as $84,000–$86,000 in late November — a sharp correction, but recovery has brought it back above $90,000, according to data by CoinGecko.
The price decline is a domino effect of several underlying factors playing in the background.
Bitcoin typically thrives in a low-interest-rate environment, but growing uncertainty over whether the Federal Reserve will cut rates at the December FOMC meeting has added pressure, contributing to the latest pullback.
Analysts are unsure if the Fed will cut interest rates because of the recently released US job market data.
The country added 119,000 jobs in the month of September, which is higher than the 51,000 jobs that many analysts expected.
Rising discussions about the AI bubble have also created turbulence in the crypto market since tech stocks tend to move in tandem with Bitcoin.
The buzz left the world’s largest tech companies Nvidia, Amazon and Microsoft, in the red by the close of last week, with NVIDIA as the biggest casualty.
Despite its strong Q3 earnings report, the NVIDIA stock is still struggling to gain ground after a report that it could face tough competition from Google.
The combined effect of interest rate cut uncertainty and fears of an AI bubble has wiped out over $1 trillion from the crypto market in just six weeks.
Bitcoin’s price slump can also be attributed to the massive selloff of Bitcoin by long-term holders.
According to a report released by Deutsche Bank, about 800,000 Bitcoin was dumped as holders took profits from the October highs.
The shift in trader behaviour did not emerge out of nowhere.
Data from Leverage.Trading, an independent risk-first analytics and educational publisher that analyses trader behaviour across global contract and margin markets, indicates that traders had already begun tightening their risk controls before the current pullback began.
The analysis is based on anonymised trader interaction data across major leveraged crypto exchanges.
In their October 2025 Crypto Contract & Margin Risk Report, the publisher found that margin-related checks from its risk calculators spiked in the days leading into a reversal.
This data supports Coinglass’ BTC/USDT liquidation heatmap for Binance, which showed a concentration of potential liquidation levels below the $120,000 price between October 10 and 11.
There appears also to be a clear correlation between traders’ behaviour and subsequent market movements.
For instance, prior to the October 10 market crash, which erased almost $800 billion in crypto market cap, Leverage.
Trading’s data experienced a sharp 85% increase in risk-related checks, a sign that many traders were actively reassessing exposure rather than simply riding the wave.
Funding rate and market sentiment
Bitcoin remains far from reaching its historical price of $126,000, but has rebounded recently to trade in the $90,000–$94,000 range.
The average funding rate for Bitcoin currently stands at 0.0042%, a sign that traders holding long positions are required to pay a periodic fee to traders holding short positions.
In essence, a positive funding rate is a market sentiment indicator reflecting potential bullish movement.
As per Coinglass data, open interest, which reached 752,000 BTC on November 21, has fallen to 642.20K BTC at the time of writing.
Falling open interest in a bearish market suggests that traders are closing out their positions, which can signal that selling pressure is weakening and the trend is losing strength.
This could either mean that sellers are taking profits, the market is nearing a bottom, or that traders are losing conviction and exiting the market, potentially leading to a consolidation or even a trend reversal.
Whatever the case, traders need to exercise caution while Bitcoin’s near-term price direction remains highly uncertain. Running risk-related checks can help reduce exposure to sudden wipeouts.
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