Bitcoin has suffered a dramatic selloff over the past 120 days, plunging more than $53,000 from its October 2025 peak of $126,000 to a new yearly low below $73,000. The decline has wiped out over $1.1 trillion in market capitalization, leaving bitcoin roughly 42% below its all-time high.
The move has cemented bitcoin’s position in a deep bear market, even as traditional financial markets continue to show resilience. The sharp contrast has intensified debate among investors over whether the crypto downturn reflects market manipulation or deeper structural stress behind the scenes.
Why crypto is diverging from U.S. equities
While bitcoin and the broader crypto market have been sliding, U.S. stock indices remain close to record levels. The S&P 500 is just 1.5% below its all-time high, the Nasdaq sits 3.6% lower, and the Russell index is down 4.2% from its peak.
By comparison, crypto losses are far more severe. Bitcoin is down 42% from its record high, while Ethereum has fallen roughly 56%. Analysts say the divergence highlights how differently investors are treating digital assets compared with equities.
As previously covered, cryptocurrencies tend to be more sensitive to tightening liquidity, leverage, and shifts in speculative appetite. With fewer fundamental anchors than equities, crypto prices can unravel rapidly once confidence weakens.
Some market commentators argue that the scale of the decline suggests more than normal risk-off behavior. On social media, analysts have described the situation as either an “insane level of manipulation” or evidence that “something very serious has happened behind the scenes” in the crypto ecosystem.
What the bear market signals for investors
The depth of the selloff has raised concerns about broader confidence in digital assets. Despite growing institutional involvement over recent years, crypto markets remain vulnerable to sharp drawdowns when sentiment turns and leverage unwinds.
For investors, the comparison with equity markets is particularly stark. While U.S. stocks continue to be supported by earnings, buybacks, and expectations of policy stability, crypto markets lack similar structural support during downturns.
The sustained weakness in both bitcoin and ethereum suggests that this is not a single-asset correction but a market-wide repricing. Analysts note that prolonged periods of underperformance often force long-term holders to reassess exposure, further pressuring prices.
At the same time, the extreme divergence could eventually attract contrarian interest if selling exhausts itself. Historically, deep bear markets in crypto have been followed by periods of sharp recovery, though timing remains highly uncertain.
For now, the message from markets is clear: while traditional assets remain near historic highs, cryptocurrencies are facing one of their most challenging phases in years. Whether the cause is manipulation, hidden stress, or a fundamental reset, the crypto market’s struggle has become impossible to ignore.