Bitcoin (BTC-USD) and broader cryptocurrency markets have struggled to regain momentum after hitting record highs in early October, with renewed crash fears emerging even among some of the sector’s most bullish commentators.

Bitcoin (BTC-USD) has fallen sharply from a peak of around $126,000 (£94,345) on 6 October to now hover just above $87,000, a drop of more than 30%, as macro uncertainty intensifies and warnings mount over the sustainability of the rally.

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Bloomberg Intelligence senior commodity strategist Mike McGlone linked bitcoin’s (BTC-USD) recent weakness to what he describes as “post-inflation deflation,” pointing to the asset’s performance following recent Federal Reserve easing.

“Since the Fed cut 25 basis points on September 17, bitcoin (BTC-USD) has dropped almost 25%. Is it the start of post-inflation deflation or just a dip in the uptrend? My bias is the former,” McGlone wrote on X.

Cryptocurrency markets are ending the year caught between resilience and fragility, as investors digest a Federal Reserve policy stance that delivered a rate cut but retained a cautious tone. The latest Federal Open Market Committee (FOMC) decision has been characterised by analysts as a hawkish-tilted cut with a dovish undertone, aimed at supporting the labour market while maintaining pressure on inflation.

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Policymakers have emphasised that future decisions will remain data dependent, particularly given distortions in recent economic releases linked to shutdown effects and lagging indicators.

The Fed’s dot plot now suggests a median policy rate of around 3.25% to 3.5% at the next meeting, while projections for 2026 appear flatter than markets had expected. Futures markets are currently pricing roughly 2.3 rate cuts over the coming year.

Despite some regulatory progress, analysts warn that crypto markets remain exposed to structural risks.

“Crypto remains caught in the macro crosscurrents,” QCP Capital analysts said. “Beyond a lack of near-term catalysts, a new structural risk is emerging. MSCI is reviewing the index eligibility of digital-asset treasury companies, with potential exclusions for firms holding more than 50% exposure to crypto. If enacted, passive outflows could reach up to $2.8bn, adding pressure to an already fragile market.”

QCP added that while Strategy (MSTR) has submitted a mitigation proposal, clarity is unlikely before mid-January, with any potential changes expected in February.