Bitcoin (BTC) Faces Potential Bottom Amid Market Volatility
Felix Pinkston Nov 18, 2025 04:49
Bitcoin experiences significant drawdown, trading below $94,000. Market indicators suggest potential stabilization, while US economic challenges and regulatory developments add complexity.
Bitcoin (BTC) has experienced its third-largest drawdown of the current cycle, plummeting 25% from its all-time high to trade below $94,000, according to Bitfinex Alpha. The cryptocurrency's momentum remains on a downward trajectory in the short term, yet there are signs that the market may be entering a consolidation phase rather than an extended decline.
Market Indicators and Analysis
BTC is currently trading below the short-term holders' (STH) cost basis of $111,900 and the -1 standard deviation band near $97,500, which keeps downside risks present until these levels are reclaimed. However, on-chain indicators are beginning to show signs of exhaustion. The STH Realised Profit-Loss Ratio has fallen below 0.20, indicating that over 80% of coins moved on-chain are being sold at a loss, a zone historically associated with market bottoms. Furthermore, STH supply in profit has collapsed to 7.6%, reminiscent of prior cycle troughs. While further demand inflows are needed to confirm a bottom, these metrics suggest that a stable base may form soon.
US Economic Context
The US enters late 2025 with a softer macroeconomic backdrop following a 43-day government shutdown, which has inflicted $7–$14 billion in permanent GDP losses and liquidity stress among workers. Although markets initially dismissed the disruption, sentiment quickly deteriorated, impacting the S&P 500 as investors reconsidered fiscal risks and the possibility of a Federal Reserve pause.
Business sentiment is cooling as well, with the NFIB Small Business Optimism Index slipping in October due to weaker sales, tighter profits, and labor shortages. Global demand is also weakening, as evidenced by the Global PMI New Export Orders Index's drop to 48.5, marking its fastest contraction in nearly two years.
Regulatory Developments and Global Trends
In regulatory news, US crypto regulation has taken a significant step forward with a bipartisan Senate draft bill proposing to shift digital asset oversight from the SEC to the CFTC. This legislation would classify most tokens as "digital commodities" and necessitate exchange and custodian registration under a commodities-style framework, although questions about DeFi and AML rules remain.
Crypto is expanding into entertainment, with TKO Group Holdings, parent of the UFC, signing a multiyear deal with Polymarket to integrate real-time prediction-market data into live events starting in 2026. Meanwhile, the Czech National Bank has launched a $1 million pilot portfolio containing Bitcoin, a stablecoin, and a tokenized deposit, marking its first direct exposure to digital assets, reflecting growing interest in blockchain-based financial infrastructure.
For more information, visit the Bitfinex Alpha.
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