Bitcoin Updates: Negative Cycle Drives Bitcoin Down Even as Long-Term Outlook Remains Positive

The demand for Bitcoin is weakening as spot ETF withdrawals, shrinking stablecoin supplies, and changes in corporate treasury strategies indicate capital is leaving the crypto sector,

. Nevertheless, the long-term outlook remains optimistic, though investors should prepare for a volatile short-term period.

BlackRock’s recent

ETF saw $520 million in redemptions—its largest monthly outflow since inception— . Where ETFs once helped stabilize Bitcoin’s price, they are now intensifying downward momentum, no longer absorbing sell-offs. Technical signals support this shift: IBIT has dropped below a crucial trendline, and , further fueling bearish sentiment.

The outflow of capital is also apparent in the stablecoin market, which has seen its total supply decrease for the first time in several months. For instance, the algorithmic USDE token

following the liquidation event on October 10, indicating a rapid withdrawal of liquidity. At the same time, digital asset treasuries (DATs), which previously issued shares to acquire , are now , as demonstrated by Sequans.

NYDIG’s Greg Cipolaro explains that these reversals are creating a feedback loop. The October 10 liquidation— —set off a sequence where former growth drivers now accelerate declines. “The long-term case remains, but the near-term could be dominated by familiar cyclical forces,” Cipolaro commented.

Despite the current slump, there are still signs of strength.

to 58.8%, the lowest since December 2024, while the Altcoin Season Index has reached a one-month peak. Some analysts believe this could mean either a deeper correction or a shift toward higher-risk assets. “BTC.D is turning bearish on the weekly chart,” , referencing a possible head-and-shoulders pattern that may lead to further declines in Bitcoin’s market share.

The wider market context is also revealing.

at the end of November, resulting in over $914 million in liquidations, with long positions making up 78% of the losses. Still, past trends and retail investor sentiment hint at a possible recovery. Data from Santiment shows that retail traders expect a fall below $70,000, but markets often move against such extreme pessimism.

Currently, attention is on whether Bitcoin can reclaim important price levels.

would indicate a bullish turnaround, while dropping into the $72,000–$78,000 zone could prompt a “cycle reset” as long-term investors start accumulating again. Meanwhile, institutions are adjusting their approaches, with some looking into Bitcoin-native yield strategies as passive buying slows.