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Thursday Nov 20 2025 05:40
2 min
Bitcoin has recently experienced a notable price decline, sparking questions about the underlying causes. While some speculated that the recent US government shutdown or growing concerns about an AI bubble might be to blame, crypto analysts offer a different perspective.
Victoria Scholar, head of investment for Interactive Investor, argued that fears of an AI bubble and the market's heavy dependence on a handful of tech giants have prompted investors to reduce their exposure to speculative assets like Bitcoin. However, this view isn't widely supported among specialized analysts.
Rational Root, an on-chain analyst, suggests that the most likely reason for Bitcoin's decline is the excessively high levels of futures leverage in Bitcoin. He explained that this factor, rather than the US government shutdown, is what led to the pullback from its all-time highs of $125,100 in October.
Analyst PlanB agrees with this sentiment, dismissing the idea that AI concerns might be affecting Bitcoin's price. He pointed to Nvidia's strong earnings, demonstrating that the AI sector is still thriving. Thus, the bubble argument doesn't seem to hold water in this context.
PlanB suggests that the remaining key factors that could explain Bitcoin's price decline are the four-year cycle and delayed global liquidity. However, he believes the four-year cycle may not be as relevant as it once was, reflecting the ongoing debate in the crypto industry.
Swan Bitcoin CEO Cory Klippsten emphasizes that institutional adoption may have eliminated the price cycles that previously characterized Bitcoin.
Global liquidity, often tracked using the M2 money supply, is a common topic among Bitcoin holders. Strike CEO Jack Mallers argues that Bitcoin is the asset most sensitive to liquidity, moving first and reflecting economic realities.
Rational Root emphasizes that Bitcoin now has a "clean slate" and a potential opportunity for further gains. He points out that the multiple resets the market has experienced in the last three years have paved the way for future upward movements.
Some analysts suggest that ending the US government shutdown and returning to regular legislative sessions may lead to an increase in approvals for crypto exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) in 2026.
Risk Warning: This article is provided for informational purposes only and does not constitute investment advice, investment research, or a recommendation to trade. The views expressed are those of the author and do not necessarily reflect the position of Markets.com. When considering shares, indices, forex (foreign exchange), and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and may not be suitable for all investors. Leveraged products can result in capital loss. Past performance is not indicative of future results. Before trading, ensure you fully understand the risks involved and consider your investment objectives and level of experience. Cryptocurrency CFD trading restrictions may apply depending on jurisdiction.
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