"Bitcoin is entering a decisive phase following a significant correction in the final quarter of 2025. After reaching a peak around USD 126,000 in approximately October this year, the market corrected sharply by nearly 35% to around USD 80,000 before the downward momentum temporarily paused. This pullback reflects an important shift in Bitcoin's investor structure. Bitcoin is no longer driven primarily by retail speculative flows as in previous cycles, but is increasingly influenced by macroeconomic factors, institutional capital flows, and the regulatory framework."
"The most important underlying factor influencing Bitcoin during this period is the global monetary policy environment, particularly the policy direction of the U.S. Federal Reserve. At present, interest rates remain elevated at 3.5% - 3.75%, while the market has begun to price in the possibility of Fed policy easing in the second half of 2026 rather than at the beginning of the year. This is highly relevant for Bitcoin, as real interest rates and opportunity costs remain relatively high in Q1."
Bitcoin corrected sharply from around USD 126,000 to about USD 80,000 in late 2025, marking a nearly 35% pullback and a pause in downward momentum. The investor base has shifted from retail speculative flows to macroeconomic influences, institutional capital, and regulation. Global monetary policy, especially U.S. Federal Reserve direction, is the primary driver, with interest rates at 3.5%–3.75% and markets pricing easing only in the second half of 2026. High real rates and opportunity costs are likely to keep liquidity tight and Bitcoin trading cautiously in Q1. Spot Bitcoin ETF assets exceeded USD 110 billion, but ETF flows have become more volatile with intermittent net outflows.
Read at London Business News | Londonlovesbusiness.com
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