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Bitcoin’s steep fall over the past few weeks has raised fears of a deeper slump, with Deutsche Bank outlining five major factors behind the decline.Analysts at the bank said they are unsure whether the cryptocurrency will stabilise soon, warning that the latest downturn is different from earlier crashes dominated by retail speculation.

Risk-off mood hits crypto

According to Decrypt, Deutsche Bank analysts said Bitcoin has been moving in line with tech stocks as global risk appetite weakens. Concerns around the broader macro environment, Donald Trump’s unpredictable trade actions, and doubts over inflated AI valuations have dragged down risk assets generally — Bitcoin included.

Hawkish Fed pressures prices

Bitcoin historically fares better when interest rates are low. However, the US Federal Reserve’s mixed messaging on whether it will cut rates again in December has hurt sentiment. This uncertainty has weighed on Bitcoin’s performance, reinforcing its sensitivity to monetary policy shifts.

Stalled Clarity Act slows adoption

The Guiding and Establishing National Innovation for US Stablecoins (Genius) Act, passed earlier this year, boosted optimism around regulation. However, the follow-up Clarity Act, which aims to define market structure rules, has hit a wall. As per Decrypt, the delay has dampened institutional confidence and slowed adoption.

Institutional pullback after major liquidations

Institutional investors have been withdrawing following the massive $19 billion liquidation event on 10 October. As per Decrypt, Deutsche Bank analysts said that falling liquidity has made any price recovery harder. Many futures traders also exited positions, intensifying volatility.

Long-term holders cash in

After Bitcoin crossed $126,000 last month, long-time holders took profits. Around 800,000 BTC were sold in just one month — the biggest such offload since January 2024.This added further downward pressure.

A $1 trillion market wipeout

Bitcoin plunged from above $126,000 in early October to below $82,200 before recovering to around $88,500. Despite the mild rebound, nearly $5 billion has exited Bitcoin-linked investment products, and the overall crypto market cap has dropped by 24% — wiping out $1 trillion.Although often compared to gold or US treasuries, Bitcoin has behaved “more like a high-growth tech stock,” according to Deutsche Bank. The bank’s analysts wrote that Bitcoin’s correlation with the Nasdaq 100 stands at 46% this year, while its link with the S&P 500 is 42% — levels similar to the Covid-19 crisis in 2022, as per Decrypt. Gold and treasuries, meanwhile, have outperformed it.Analysts cited comments from Federal Reserve Chair Jerome Powell and Governor Lisa Cook, which cast doubt on expectations of a December rate cut. This uncertainty could cause further weakness, with Bitcoin’s correlation with Fed rates at -13% this year.

Liquidity shock continues to hurt the market

The October crash created a liquidity vacuum that still hasn’t fully healed. Deutsche Bank, citing Kaiko data, noted that major exchanges saw order books collapse, with “ask-side liquidity effectively absent for several minutes.” This scared off market makers and deepened the price drop. The bank said the resulting negative loop between shrinking liquidity and falling prices continues to weigh on Bitcoin.