The price of Bitcoin has retraced more than 50% from its peak last year. Although there was a subsequent minor rebound, the overall cryptocurrency market remains in an extremely depressed state. Jason, an analyst at StarEx Exchange, believes that this decline is the result of a combination of various negative macro and industry factors, and it will be necessary to wait for the panic sentiment to dissipate.
1. Macro Shocks and Risk Appetite Contraction
Uncertainty in the recent macro environment has significantly increased. The U.S. Supreme Court rejected large-scale tariff measures implemented by the Trump administration under the International Emergency Economic Powers Act (IEEPA), but the White House subsequently announced new temporary tariff arrangements, leaving trade policy prospects still complex. The ruling by the U.S. Supreme Court and the response from the Trump administration have heightened concerns in global markets about policy continuity.
At the same time, tensions between the U.S. and Iran have escalated again, raising geopolitical risks. Minutes from the Federal Reserve meeting indicate that officials remain cautious about interest rate cuts, with inflation’s downward trajectory still uncertain. Against this macro backdrop, global capital tends to reduce risk exposure. Like tech stocks, Bitcoin has been categorized as a ‘high-beta asset’ and become a target for selling.
2. Selling Structure: Dominated by U.S. Capital
On-chain and exchange data show that this round of selling has primarily come from the U.S. market. Coinbase, the largest compliant exchange in the U.S., experienced significant discounts, with prices falling below those on offshore exchanges like Binance, indicating heavy selling pressure in the U.S. Meanwhile, U.S.-listed Bitcoin spot ETPs have seen noticeable net outflows.
However, it is worth noting that long-term holders and ‘early whales’ have not shown signs of large-scale liquidation. Derivatives market open interest has halved since October, and perpetual contract funding rates have turned negative, showing that the market has undergone significant deleveraging. Historical experience suggests that such deep deleveraging often occurs near a阶段性 bottom.
3. Regulatory Dynamics and Structural Progress
Short-term trends will continue to be influenced by developments in U.S. crypto market structural legislation. Negotiations around the CLARITY Act are yet to be finalized, but the bipartisan push toward a digital asset regulatory framework remains unchanged. Regulatory clarity is a more critical long-term variable than any single bill. Recent industry developments have also sent positive signals. For example, Bitdeer’s sale of all its self-held BTC raised market concerns, but the company explained that it was preparing liquidity for potential land acquisitions, not signaling a loss of confidence in the industry. On the Ethereum front, the Ethereum Foundation released a 2026 protocol priority update, continuing to advance scalability and censorship resistance upgrades. In the DeFi space, Aave Labs proposed a governance plan to channel 100% of brand product revenue into the DAO, aiming to reshape the token value capture mechanism.
These changes indicate that despite the low prices, infrastructure development and institutional improvement are still progressing.
4. Looking Ahead: Two Key Themes
If the marketFrom a technical perspectivehas approached a short-term bottom, the core drivers of a future rebound may stem from two major fundamental trends:
First, regulatory clarity will drive the adoption of stablecoins and tokenized assets. As institutional capital enters within a compliant framework, leading smart contract platforms will benefit directly, such as Ethereum (ETH), Solana (SOL), and key oracle infrastructure Chainlink (LINK).
Second, financial innovation in blockchain will deepen, with privacy, perpetual contracts, and prediction markets emerging as the most active areas of innovation. Representative assets include Zcash (ZEC) and the decentralized derivatives platform Hyperliquid (HYPE). Meanwhile, the gradual clarification of regulatory boundaries for prediction markets may create new opportunities for on-chain risk hedging and information pricing.
StarEx exchange analyst Jason believes that the recent decline in the crypto market is fundamentally a result of global deleveraging across risk assets rather than a collapse in industry fundamentals. Bitcoin is both a growth asset and a potential long-term store of value. During its growth phase, it inevitably experiences high volatility; however, as adoption increases and regulatory frameworks mature, its return profile may gradually converge toward that of gold. Bear markets often obscure structural progress while sowing the seeds for the next cycle. When deleveraging concludes, policy pathways become clear, and innovations continue to materialize, the crypto market may undergo a new round of revaluation amidst skepticism.