Bitcoin Plunges Below $100,000, Crypto Market Enters ‘Extreme Fear’ Territory
Bitcoin has tumbled sharply below the $100,000 mark, erasing all gains made in 2025 and plunging the broader cryptocurrency market into what analysts are calling ‘extreme fear’ territory. The sudden downturn has sent shockwaves across the digital asset landscape, with traders bracing for further declines and warning of a potential crash to $80,000.
Just over a month ago, Bitcoin reached a record high of $126,272.76 on October 6, 2025. However, the momentum has evaporated rapidly, and the cryptocurrency officially entered ‘bear market’ territory last week after falling more than 20% from its recent peak. Over the weekend, Bitcoin also flashed a bearish ‘death cross’—a technical signal that occurs when the 50-day moving average drops below the 200-day moving average, often indicating a prolonged downtrend.
Market sentiment has deteriorated quickly, with investors aggressively seeking downside protection. Demand for put options—contracts that profit if Bitcoin falls further—has surged, according to data from Coinbase-owned Deribit. Protective contracts set to expire later this month are seeing particularly strong activity as traders brace for additional volatility.
The broader crypto market has not been spared. The total market value of all cryptocurrencies has dropped to $3.12 trillion, down more than 1.65% in a single day. Bitcoin’s price has dipped as low as $81,868.75 in recent trading, marking its weakest monthly performance since 2022.
Analysts attribute the downturn to a combination of macroeconomic uncertainty and technical factors. The Federal Reserve’s policy shifts in 2025 have created significant ripple effects across cryptocurrency markets. While the initial rate cut in October was expected to boost risk assets, the muted response from crypto markets reflected a ‘neutral liquidity’ environment rather than the abundant easing typically associated with bullish movements.
For the first time since tracking began in 2011, Bitcoin has ranked as the worst-performing major asset class in 2025, while gold has emerged as the year’s strongest performer. This reversal challenges Bitcoin’s long-held reputation as ‘digital gold’ and highlights its vulnerability during periods of true inflation and economic uncertainty.
Empirical data confirms that global uncertainty factors, including economic policy shifts, directly trigger heightened volatility in cryptocurrency markets. The causality-in-variance Lagrange Multiplier tests demonstrate that increased Bitcoin volatility is uniquely caused by economic policy uncertainty, illustrating how macroeconomic conditions transmit turbulence across asset classes.
Despite the current downturn, some analysts remain cautiously optimistic about the long-term outlook for Bitcoin. Standard Chartered, for example, projects a potential move to $200,000 by the end of 2025, though such targets would require a 45 to 60% increase from current levels. However, most agree that the market is likely to remain volatile in the near term, with further corrections possible before any sustained recovery.
As the crypto market navigates this turbulent period, investors are advised to exercise caution, perform thorough due diligence, and consult with financial professionals before making investment decisions. The recent crash underscores the importance of risk management in an asset class known for its dramatic swings.