Bitcoin's Recent Decline: Reasons and Future Expectations

Recently, the fluctuations in the price of Bitcoin (BTC) have raised question marks for many investors, while there were positive developments alongside the negative outlooks. However, a CryptoQuant analyst stated that this situation represents a correction that makes sense despite the surface-level positive news.

Among the main reasons triggering Bitcoin's decline are the weakening of speculative momentum in the markets after a prolonged period of enthusiastic movements, decreased institutional demand, and increasing uncertainties regarding monetary policy. Especially, the end of the quantitative tightening (QT) conducted by the Federal Reserve (Fed), the temporary ceasefire achieved in US-China trade talks, and consecutive interest rate cuts have boosted market morale; however, the sharp declines in Bitcoin and US indices marked a significant contradiction.

According to CryptoQuant data, one of the fundamental dynamics behind the recent decline lies in the change in behavior of institutional investors. Specifically, the Coinbase Premium Gap indicator turning negative again indicates a decline in interest from US-based investors. Historically, such data has been interpreted as a precursor to short-term corrections.

Fed Chairman Jerome Powell's statements also became another factor disrupting market balances. Powell announced that QT would officially end on December 1 and expressed that a new interest rate cut in December was not guaranteed. Differences of opinion within the Fed and weakening employment data negatively impacted market expectations, leading to sharp sell-offs in both the Dow Jones and Bitcoin prices.

Moreover, despite announcements of successful outcomes from discussions between the US and China, it was reported as one of the latest situations that this was only a temporary ceasefire. China’s warnings regarding Taiwan and the US nuclear test reports have heightened global risk perception again. However, the CryptoQuant analyst emphasized that despite short-term pressures, the medium-term outlook remains positive. The increase in liquidity in the markets with the end of QT creates expectations that risk appetite may revive in early 2026.

It is crucial for investors to carefully analyze the fundamental dynamics behind the recent decline in Bitcoin's price. Whether institutional demand will strengthen again and the impact of the Fed's policies on the markets are critical points for investors to monitor.