The world’s largest cryptocurrency – Bitcoin is experiencing its sharpest monthly drop in more than three years. The digital token has fallen over 21% so far this month — its biggest decline since June 2022.
This slump is largely driven by forced liquidations and a broad shift toward risk aversion in speculative assets. Many major altcoins have also tumbled, deepening the overall downturn across the crypto market.
On Tuesday, November 25, the leading cryptocurrency traded near $88,000 on Tuesday after rebounding from a sharp drop that pushed it to a seven-month low.
“The crypto market is balancing between a deep washout and signs of selective recovery. The recent crypto winter crash cleared excess leverage and thinned liquidity, while shifting Fed rate expectations and new ETF issuances are fueling episodic flows,” said Avinash Shekhar, Co-Founder&CEO,Pi42.
Here are 3 reasons behind the downfall
Profit booking
Bitcoin has dropped sharply since early October, sliding from around $126,000 to under $82,200, based on data from CoinGecko.
According to analysts, long-term investors have been booking profits, selling off roughly 800,000 BTC over the month — the largest wave of such selling since January 2024.
Fed rate cut
Bitcoin tends to thrive when interest rates are low. But with the Federal Reserve sending mixed messages about whether a third rate cut will happen in December, that uncertainty is likely impacting BTC’s price.
“On chain and technical signals hint at a potential rebound if buyers return, although structural downtrend markers remain relevant. Growing optimism around a possible December rate cut has eased some macro pressure and sparked tactical buying,” Shekhar added.
Risk-off sentiment
Bitcoin has slumped in recent weeks mirroring the decline in tech stocks and other risk-sensitive assets, as macroeconomic worries, Trump’s unpredictable trade war, and concerns over inflated AI company valuations weigh on sentiment.
Crypto Market Outlook
According to Raj Karkara, COO, ZebPay, Bitcoin is entering the coming week at an interesting moment where recent declines, though uncomfortable, continue to reflect normal market behaviour after a strong rally.
“Investors are locking in profits, sentiment is adjusting to global cues, and short-term caution is visible, but none of this points to a structural breakdown in Bitcoin’s long-term trend. While brief dips, even below the recent $82K range, cannot be ruled out, on-chain indicators, institutional interest, and long-term holder conviction remain firmly in place,” Karkara said.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
