Bitcoin s Market Shift: From Peaks to New Realities

Bitcoin s remarkable rise to 126,000 in October 2025 was swiftly followed by a significant downturn, ending the year below 100,000. This unexpected turn has raised questions about the reliability of the traditional 4-year halving cycle in predicting market behavior. Analysts suggest that the market is undergoing a transformation influenced by institutional investments and exchange-traded funds ETFs , leading to a more stable but slower price movement.
The market sentiment was overwhelmingly positive when Bitcoin reached its peak on October 6, 2025, with many expecting a year-end rally. This optimism was largely based on the historical 4-year cycle, which indicated that 2025 would be a year of significant gains following a halving event. However, this narrative changed dramatically on October 10 when a massive liquidation cascade triggered a sharp decline, bringing Bitcoin down to nearly 80,000. Despite some signs of recovery, the asset struggled to regain the crucial 100,000 level before the year ended.
The events of 2025 have prompted a reevaluation of the 4-year cycle s predictive power. Investors are now looking beyond historical patterns to new metrics for assessing Bitcoin s long-term trajectory. Analysts agree that Bitcoin is experiencing a fundamental shift in its market dynamics. The performance in 2025 is not viewed as a failure but rather as evidence that institutional smart money has significantly altered the market s structure. This shift has led to slower price appreciation but a more resilient price floor.
There is a growing consensus that Bitcoin has moved beyond being a speculative asset. Factors such as U.S. Federal Reserve interest rate policies and institutional rebalancing are now more influential on its price than retail speculation. Han Tan, chief market analyst at Bybit Learn, noted that while retail participants still play a significant role in crypto, their influence has been moderated by institutional players. Richard Usher, director of trading at Openpayd, echoed this sentiment, stating that well-resourced participants have matured the market structure, which should support more durable price action over time.
Signs of this shift were evident in early January 2026 with significant inflows into ETFs on January 2 and January 5. These inflows coincided with Bitcoin surpassing 94,000 for the first time since December 9. Unlike the brief rallies of late 2025, Bitcoin appears to be maintaining its position above 90,000. However, some analysts attribute this early 2026 rally more to a short squeeze where traders betting on a price drop are forced to buy back positions than to new capital. Nima Beni, founder of Bitlease, pointed out that while the squeeze provided liquidity, smart money played a crucial role in establishing a price floor.
Iliya Kalchev, a Nexo Dispatch analyst, agreed that ETF inflows provide direct support to the spot market. He noted that inflows into spot Ethereum and select altcoin ETFs indicate a broader, albeit cautious, risk re-engagement rather than a narrow squeeze-driven move. Ben Caselin, CMO at the crypto exchange VALR, concluded that the rally is a healthy mix of technical forced buying and fresh annual capital deployments. He emphasized that this blend underscores a healthier rally foundation than pure liquidation-driven spikes.