BTC Drop: Panic or Pre-Rally Signal?

Bitcoin’s sharp decline continued this week, breaching the $90,000 mark for the first time in seven months. This sell-off has pushed the Crypto Fear & Greed Index down to 15, its lowest point since the beginning of the year, signaling widespread market panic. The original cryptocurrency has tumbled nearly 30% from its October peak of approximately $126,000 over the past six weeks.

While the current situation may appear dire, this drawdown seems to echo patterns observed by long-term traders. Data indicates that since 2017, Bitcoin has endured over ten corrections of 25% or more, six of 50% or more, and three significant crashes exceeding 75%. The cryptocurrency has seen a drop of more than 15% in the last 30 days alone.

Crucially, every past correction of this magnitude in Bitcoin’s history has eventually been followed by new all-time highs. Analysts suggest that the current market behavior aligns with this historical trend, characterized by a volatile, sentiment-driven washout that typically marks the formation of late-cycle bottoms rather than early-cycle tops.

Bitcoin’s November Meltdown

The market trajectory changed dramatically as November began. After months of anticipation for rapid and aggressive rate cuts, statements from Jerome Powell effectively dampened those expectations. Following the Federal Reserve’s stance, the flow into Crypto ETFs, which were instrumental in this year’s rally, also stalled. In the absence of sustained institutional buying pressure, retail capitulation began to take hold.

To all the crypto investors anxiously watching right now:

Since 2017, Bitcoin has seen:

1. 10+ declines of -25% or more
2. 6 declines of -50% or more
3. 3 declines of -75% or more

Every single decline of the current magnitude or more since Bitcoin’s inception has been followed…

— The Kobeissi Letter (@KobeissiLetter) November 18, 2025

Market sentiment has been severely shaken and has fallen to multi-year lows. The Fear & Greed Index has not registered a reading of 15 since the post-halving volatility experienced in 2024. Analysts point out that such extreme readings often signify forced selling rather than the beginning of a prolonged downward trend. Bitcoin is currently positioned near a cluster of historical support levels between $88,000 and $90,000, a zone many funds are closely monitoring for potential rebound signals.

Adding to the market’s unease, Mt. Gox, the defunct cryptocurrency exchange, transferred 10,608 BTC (valued at approximately $953 million) from one of its cold wallets. This marks the largest transfer from the exchange in the past eight months, though it still holds an estimated $3.14 billion worth of Bitcoin. While Mt. Gox has delayed creditor repayments until late 2026, any on-chain activity from the exchange tends to spook traders, contributing to market volatility.

The price of BTC saw an additional 3% drop in the last 24 hours, trading at an average price of $91,274 at the time of reporting. Its 24-hour trading volume surged by 55% to $116 billion, indicating a rapid movement of funds within the market.

Data from CoinGlass reveals that Bitcoin alone experienced $563 million in liquidations (both long and short positions) within the last 24 hours. Approximately $400 million (71%) of these liquidated bets were long positions, suggesting that traders remained optimistic about a Bitcoin recovery from the dip. However, the overall selling pressure ultimately overwhelmed these positions.

Final Thoughts

Despite the recent sharp decline and indicators of extreme market fear, historical data suggests that Bitcoin has a strong track record of recovering from significant drawdowns and reaching new highs. While factors like central bank policy shifts and movements from entities like Mt. Gox can create short-term volatility, the underlying market structure and historical precedent offer a perspective of potential resilience.