Bitcoin has shed all gains accumulated since the start of 2025, closing the week at $94,290 after breaking through the pivotal $96,000 support threshold. The dramatic downturn comes amid massive ETF outflows and mounting macroeconomic uncertainty, pushing market sentiment into extreme fear territory.
Bitcoin experienced a significant setback this week, plunging below the psychologically important $96,000 support level to close at $94,290. The decline marks a critical inflection point for the world's largest cryptocurrency, erasing every gain made throughout 2025 and raising concerns among investors about the sustainability of the current bull market.
The breakdown below $96,000 represents more than just a price milestoneβit signals a fundamental shift in market dynamics. This support level had held firm through multiple tests in recent weeks, and its breach suggests weakening conviction among buyers. Technical analysts are now eyeing lower support zones as potential targets if selling pressure continues.
Multiple factors have converged to create the current bearish environment. Bitcoin exchange-traded funds have experienced substantial outflows, indicating institutional investors are reducing their exposure to cryptocurrency assets. This trend reflects broader risk-off sentiment permeating financial markets as investors grapple with persistent inflation concerns, geopolitical tensions, and uncertainty surrounding monetary policy decisions.
The Fear and Greed Index, a widely-watched sentiment indicator, has plunged into "extreme fear" territory, suggesting panic may be overtaking rational decision-making among market participants. Historically, such extreme readings have sometimes preceded market bottoms, though timing such reversals remains notoriously difficult.
Market analysts point to the confluence of technical and fundamental headwinds as particularly concerning. The loss of 2025 gains undermines the narrative of Bitcoin as a safe haven or inflation hedge, at least in the near term. Meanwhile, leveraged positions being liquidated have amplified price movements, creating additional volatility.
Despite the current downturn, long-term Bitcoin advocates maintain that fundamental adoption metrics remain strong. On-chain data shows continued accumulation by certain wallet cohorts, and institutional infrastructure development continues unabated.
The coming weeks will be crucial in determining whether this represents a temporary correction within an ongoing bull market or the beginning of a more prolonged bear phase. Key support levels to watch include the $90,000 and $85,000 zones, while any recovery attempt must reclaim $96,000 to restore bullish momentum. Until then, caution appears to be the prevailing sentiment among cryptocurrency traders.