Crypto plunged over $1 trillion in weeks, but analysts say the downturn isn’t systemic and break down the macro drivers, institutional behavior and investor survival strategies.
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The crypto market’s most turbulent period of 2025 resulted in a drawdown that erased more than $1.2 trillion in value and sent Bitcoin () plunging from its brief $120,000 peak to the $80,000 range.
For many investors, the speed and severity of the selloff stirred déjà vu from 2017 and 2022. This week’s episode of Byte-Sized Insight hears from experts that this downturn is different — and far less catastrophic — than the headlines suggest.
Bitcoin as a sensitive asset
Macro analyst and author of the Crypto is Macro Now Substack Noelle Acheson argued that the latest dip is “not a big deal” and, crucially, “not systemic.” Instead, she called it a liquidity-driven correction sparked by shifting expectations around Federal Reserve rate cuts.
“Bitcoin is one of the most sensitive assets to liquidity sentiment.”
Acheson pointed out that Bitcoin’s supply is fixed and demand is entirely sentiment-driven.
She also highlighted an unprecedented shift: during this downturn, Bitcoin and Ether () market dominance fell not because investors rotated into safer crypto assets but because they rotated out of crypto entirely and into non-crypto markets.
To her, this is evidence that crypto is now deeply intertwined with macro forces and institutional positioning.
Market maturity but lacking narrative
For Tim Meggs, CEO and co-founder of Lo:Tech, the downturn has revealed something else: maturity. Unlike past crashes that saw cascading liquidations and corporate failures within days, this drawdown has been “measured,” he said, reflecting the slower decision cycles of institutional investors now active in the space.
“Institutions don’t operate at the pace retail does.”
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Meggs also outlined the real-time signals his firm monitors — volatility, open interest, liquidations and exchange activity — noting recent stabilization and early signs of renewed positioning. Corrections, he said, are not only expected but healthy: “Flushing out excess leverage isn’t a bad thing.”
Meanwhile, trader and author of the book The Crypto Trader, Glen Goodman described how the absence of a strong market narrative has intensified the downturn. In past cycles, Bitcoin rode waves of collective belief from “global currency” to “digital gold.”
Today, he argued, crypto lacks an equivalent narrative, making it more vulnerable to tech-stock volatility and macro pressure.
Listen to the full episode of Byte-Sized Insight for the complete interview on Cointelegraph’s Podcasts , or . And don’t forget to check out Cointelegraph’s full lineup of other shows.
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