Bitcoin is on track for a rare fourth red year as October 10’s record leverage wipeout, weak liquidity, and shaken sentiment weigh on prices and altcoins.
Summary
- Bitcoin trades below its year open, setting up only the fourth negative year after 2014, 2018, and 2022 despite far stronger fundamentals.
- An October 10 crash triggered the largest leverage liquidation in crypto history, exposing thin liquidity and scaring market makers to the sidelines.
- Analysts split on whether October marked a structural break or a healthy deleveraging that could make the next sustained BTC rally more durable.
Bitcoin is currently trading below its year-to-date starting value, putting the cryptocurrency on track for only its fourth annual decline since inception, according to market data. The digital asset previously closed the year in negative territory in 2014, 2018, and 2022, all of which were characterized as bear market years.
The potential decline in 2025 has prompted questions from market analysts, as the current year has not exhibited typical bear market characteristics seen in previous down years.
Bitcoin heading into New Year with questions
Market observers have focused particular attention on October 10, when cryptocurrency prices experienced a sharp decline, losing significant value in what has been described as the industry’s largest leverage liquidation event.
Bitcoin is stuck 😅pic.twitter.com/kF24xBSCTA
— Bitcoin Magazine (@BitcoinMagazine) December 23, 2025
“WTF happened on October 10th? Exchanges are saying they are fine. Market Makers are saying they are fine,” analyst Max Crypto wrote, noting that price movements suggest sustained selling pressure from large entities. The analyst drew comparisons to the Terra Luna collapse, stating, “This has really started to feel like a Luna event, when everyone said that we are fine, and it ended horribly.”
Investor George Bodine described October 10 as “the pivotal moment to where we sit today,” adding that “the overhang of ‘Crashtober’ still haunts us.” The October 10 event coincided with record price levels in gold and silver markets, according to Bodine, who also stated, “I have never seen the fundamentals behind Bitcoin as strong as this year.”
Crypto analyst Scott Melker characterized the October 10 event as exposing unresolved market structural issues. “October 10 wasn’t just ugly – it exposed problems that still haven’t been fixed, which is why the market feels so bad even now,” Melker stated. According to Melker, liquidity remains compromised, and market makers have adopted more cautious positioning strategies.
Melker also noted that altcoins have failed to show sustained recovery, declining when Bitcoin weakens without attracting new capital inflows. This pattern indicates capital is leaving the cryptocurrency market entirely rather than rotating between assets, according to the analyst. “October 10 broke something psychologically. It reminded everyone that this market can still just… fall apart. And once that realization sets in, behavior changes for a long time,” Melker said.
Analyst CrediBULL Crypto offered a different perspective, stating the event represented “a massive deleveraging event” rather than a structural break. The analyst noted that aggregate open interest has declined since the event, indicating reduced confidence in leveraged positions through perpetual futures contracts.
CrediBULL Crypto suggested that if prices stabilize and rise from current levels, traders will return to the market and open interest will increase again. The analyst characterized reduced leverage as potentially beneficial, stating it “simply means this next rally is even more sustainable than the prior one.”
Bitcoin (BTC) was trading lower at the time of reporting, struggling to maintain upward momentum.
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