Bitcoin experienced another difficult trading session as the world’s largest cryptocurrency continued its retreat from recent highs. The digital asset declined nearly 1.6% to $103,559.17, extending a pattern of losses that has concerned investors and prompted major financial institutions to issue cautionary guidance about the market’s direction.
The broader cryptocurrency market reflected similar weakness. Ethereum fell 3.1% to $3,448.26, while XRP dropped 2.4% to $2.39. Other popular digital tokens also moved lower, with BNB down 1.9%, Solana declining over 5%, and Dogecoin falling 2.6%. The widespread declines suggested investors were pulling back from digital assets despite potentially positive developments in traditional markets.
Massive whale activity creates concern
Market analysts have identified significant selling pressure from large holders, commonly referred to as whales in cryptocurrency circles. According to BTC Markets analyst Rachael Lucas, Bitcoin has faced heavy whale selling with approximately $45 billion offloaded since October. This sustained selling from major holders has created downward pressure that the market has struggled to overcome.
Technical levels have become increasingly important as traders watch for potential support and resistance zones. Lucas noted that resistance sits at $110,800, a level Bitcoin would need to break through convincingly to regain bullish momentum. On the downside, support appears near $103,000 at the 50-week simple moving average, a closely watched technical indicator that often provides buying interest.
Government shutdown resolution fails to lift crypto
Global equity markets advanced on Wednesday as the longest government shutdown in United States history appeared headed toward resolution. The House of Representatives, where Republicans maintain a slim majority, prepared to vote on a stopgap funding measure designed to keep the government operating until Jan. 30.
The funding bill had already passed the Republican-controlled Senate after several Democrats crossed party lines to support the package. House Speaker Mike Johnson expressed confidence about passing the legislation and sending it to the president for signature. President Trump acknowledged at a Veterans Day event in Arlington, Virginia, that the country should never have been closed and would soon reopen.
However, the positive developments in Washington failed to translate into gains for cryptocurrencies. Investor Ted Pillows suggested the market might see a relief bounce when the government shutdown officially ends, but he believes the downtrend has already been established and will likely continue despite short-term optimism.
Momentum shifts toward traditional assets
Investors appear to be rotating capital away from cryptocurrencies and into traditional equity markets. Key economic data releases have fueled speculation that the Federal Reserve might lower interest rates, making stocks more attractive relative to alternative assets like digital currencies. This shift in investor preference has contributed to the weakness in cryptocurrency prices even as equity indices have gained ground.
The changing sentiment reflects broader concerns about cryptocurrency valuations and questions about whether recent price levels can be sustained. Retail investors on platforms like Stocktwits expressed bearish sentiment about Bitcoin’s near-term prospects, with the sentiment meter firmly in negative territory.
Four-year cycle debate intensifies
One Stocktwits user captured a prevailing market view, suggesting that investors have become conditioned to expect 365-day bear cycles in cryptocurrency markets. Many traders appear to be waiting on the sidelines, anticipating lower prices and assuming that recent highs represent a cyclical top rather than a stepping stone to further gains. This expectation of weakness may become self-fulfilling as investors hold back on purchases.
Morgan Stanley sounds alarm on seasonal pattern
Major financial institution Morgan Stanley has waded into the ongoing debate about Bitcoin‘s traditional four-year cycle, warning clients that the market has entered what strategists call the fall season. Denny Galindo, an investment strategist at Morgan Stanley Wealth Management, explained during a podcast episode titled Crypto Goes Mainstream that Bitcoin’s price history consistently follows a three-up, one-down pattern.
Galindo characterized the current period as fall, a time for harvest when investors should consider taking profits from earlier gains. However, he acknowledged that debate continues about how long this fall season might last and when the next winter, or bear market phase, will begin. The implication is clear: Morgan Stanley believes now is an appropriate time for investors to lock in gains rather than chase additional upside.
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