Deutsche Bank: The recent decline in Bitcoin reflects a loss of market confidence rather than a market structure collapse

BTC-0,4%

PANews February 5 News, according to CoinDesk, Deutsche Bank in a report pointed out that the recent decline in Bitcoin reflects more a loss of market confidence rather than a market structure collapse. The report believes that three main factors are driving the decline: ongoing institutional capital outflows, decoupling from traditional market anchoring relationships, and weakening regulatory momentum. Nevertheless, the report considers the current phase a market reset that will test whether Bitcoin can surpass faith-driven rallies and regain support from regulators and institutional capital. The report shows that since peaking in October 2025, Bitcoin has fallen over 40%, with four consecutive months of decline, while gold has risen over 60% during the same period, and the stock market has also rebounded, highlighting that Bitcoin’s correlation with gold and stocks has significantly weakened. Institutional selling pressure is the direct source of stress; the US spot Bitcoin ETF has experienced continuous net outflows since October last year, with outflows exceeding $7 billion in November, and approximately $2 billion and $3 billion in December and January, respectively. Trading volume has shrunk accordingly, making prices more susceptible to sharp fluctuations. Delays in regulatory progress have also intensified market volatility. The bipartisan “Digital Asset Market Clarity Act” has stalled in Congress due to disputes over stablecoin provisions, causing Bitcoin’s 30-day volatility to rise above 40%, approaching levels seen in late October last year. Additionally, market sentiment indicators show retail interest is cooling down.

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