Bitcoin, once fueled by Wall Street capital, political endorsements, and institutional inflows, has unexpectedly stalled. After surging past $126,000 in October, Bitcoin plunged sharply, erasing all its 2025 gains before stabilizing during Monday's Asian trading session. This year, which was expected to cement Bitcoin’s legitimacy, has instead seen its price retreat significantly from record highs.

Wall Street has entered the fray, exchange-traded funds (ETFs) are bringing crypto into mainstream portfolios, and the Trump administration has fully embraced digital assets. Yet the market has pulled back—swiftly, sharply, and without clear catalysts. Data shows Bitcoin’s total market cap has plummeted by roughly $600 billion from its October peak.

Volatility is nothing new in crypto markets. But this time, the speed of vanishing conviction—and the lack of credible explanations—stands out. Anxiety is spreading across trading desks and social media. Traders are revisiting old charts, dusting off familiar theories, and desperately searching for buyers.

With no traditional Wall Street playbook for Bitcoin’s behavior—no stable correlations, no proven risk frameworks—some have fallen back on the most familiar pattern: the four-year halving cycle. Halvings, designed to occur roughly every four years, cut Bitcoin’s supply growth in half. Historically, this has sparked speculative booms followed by painful crashes, often with a lag as miners (who operate the powerful computers securing the network) tend to sell when prices weaken.

This cycle’s halving occurred in April 2024. Prices then peaked in October this year—roughly aligning with the old rhythm. But with deep-pocketed buyers shaping the market, it’s no longer clear whether this pattern still holds.

"Retail crypto sentiment is terrible, and there may still be some downside," said Matt Hougan, CIO of Bitwise Asset Management. While he expects prices to rise next year, "the market is worried the four-year cycle could repeat, and they don’t want another 50% drawdown. Investors are preemptively exiting to avoid that risk."

Bitcoin’s partial losses within the four-year cycle reflect a hangover effect and market fatigue. Retail investors were burned chasing crypto-linked stocks at highs. Then, in early October, an unexpected escalation in trade tensions—coinciding with high leverage—triggered forced liquidations. The result: overstretched expectations, fragile conviction, and a market too vulnerable to handle selling pressure once sentiment shifted.

All this unfolded just as the pro-crypto narrative seemed strongest. ETFs attracted tens of billions mid-year, rebranding Bitcoin as a macro hedge. President Trump’s crypto-friendly policies promised further upside. Yet inflows stalled. Long-term holders cashed out. And representative firms like Strategy Inc. now trade near the value of their Bitcoin holdings—suggesting faith no longer commands a premium.

"At this stage, Bitcoin trades more like a macro asset embedded in institutional portfolios, reacting to liquidity, policy, and dollar dynamics rather than mechanically predictable supply shocks," said Jack Kennett, an analyst at crypto data firm Nansen.

Despite talk of institutionalization, the market still trades on sentiment. And right now, sentiment is grim. Risk appetite has reversed. Altcoins have suffered steep losses this year. Trump’s boost hasn’t shielded crypto from macro headwinds—or competition from new speculative darlings like AI, stablecoins, and prediction markets.

"With gold and stocks near record highs, Bitcoin is 'the tip of the risk-asset iceberg—and it’s melting,'" said Mike McGlone, BI’s senior commodity strategist. "I expect Bitcoin and most cryptos to keep falling."

Market infrastructure remains intact, and Bitcoin has still posted solid gains since Trump’s election. But for an asset some predicted would hit $200,000 by year-end, the recent slump is disappointing. If Bitcoin can’t break through with policy support, growing mainstream adoption, and robust financial infrastructure—when will it?

At this point, traders’ nervousness about history repeating may be "pulling the four-year cycle into existence," said BI ETF analyst Eric Balchunas. Alternatively, he added, "the typical rhythm could be slightly disrupted—or disrupted for good."

Derek Lim, head of research at crypto market maker Caladan, noted that Bitcoin’s 2017 and 2021 bull runs weren’t just results of prior halvings but also "a stronger, more fundamental driver: global liquidity." With the U.S. government shutdown resolved, he added, that liquidity could return.