Why is Bitcoin Dropping?

Bitcoin's price is dropping because it has entered a bear market, following historical cycle patterns and lacking the euphoria and liquidity that typically drive bull runs.

• Bitcoin's price drop follows historical bear market patterns that typically start in Q4 of post-election years.

• The current market top is characterized by apathy, leading to a gradual decline without a strong altcoin rotation.

• Global net liquidity, not M2, is the key indicator, showing crypto will likely continue dropping until central bank liquidity returns due to stock market weakness.

Bitcoin is currently in a bear market, a predictable phase given its historical price cycles that consistently top out in the fourth quarter of post-election years. Unlike past cycles, the current downturn is characterized by apathy rather than euphoria, leading to a slower, more gradual decline without significant altcoin rotation. This pattern is strongly correlated with global net liquidity trends, suggesting further drops until broader market weakness triggers renewed central bank liquidity.

Historical Cycle Patterns

• 00:01:51 Bitcoin's current price drop aligns with its historical cycle lengths, as the last cycle spanned a duration similar to the previous two, indicating a natural transition from a bull to a bear market. Historically, Bitcoin bear markets consistently begin in the fourth quarter of the post-having or post-election year, a pattern observed in 2013, 2017, and 2021, and now in 2025, challenging the notion that 'this time is different' due to altcoin performance.

Apathy, Not Euphoria

• 00:04:04 Unlike previous cycles, Bitcoin did not experience a euphoric top, but rather an 'apathy' top, similar to 2019. This absence of widespread retail FOMO means the decline is slower and more gradual, driven by time-based capitulation rather than immediate, drastic price drops, and also explains the lack of significant altcoin rallies during this period.

Global Net Liquidity Impact

• 00:07:23 Bitcoin's performance is closely tied to global net liquidity, which represents the combined balance sheets of major central banks minus certain financial operations. While the stock market may continue to rise in a risk-on environment without excess liquidity, Bitcoin tends to drop, mirroring the 2019 scenario where Bitcoin faded before central bank balance sheets expanded. Until stocks show weakness and stimulate a return of significant liquidity, Bitcoin is expected to continue its decline.

Bear Market Duration and Micro Strategy

• 00:08:57 Bitcoin is estimated to have been in a bear market since October, with most such periods lasting approximately one year. This aligns with a forecast for Micro Strategy to bottom around October 2026, 98 weeks after its February 2021 high, which coincides with Bitcoin's predicted bear market end if it follows the typical one-year duration from its October 2025 peak.