Exchange Analysts Explain the Reason Behind Bitcoin’s Recent Drop and What They Expect Next – “This Level Downward Is Very Critical”

The latest report from cryptocurrency exchange Bitfinex reveals that the recent sharp pullback in the market was not a collapse, but a controlled consolidation phase.

Bitcoin fell 21.46% from its all-time high in October last week, briefly dropping below $100,000 to $99,045, according to the report. However, this move signals a search for a new bottom rather than the start of a widespread liquidation.

Bitfinex argues that both historical price data and on-chain indicators suggest that the current move closely mirrors the mid-stage corrections seen in previous cycles. These periods involve structural investors locking in their positions, reallocating capital within the ecosystem, and compressing volatility ahead of major upsides.

Bitcoin’s failure to defend its $112,500 short-term investor (STH) cost floor led to a controlled price pullback and a retest of deep support levels. This move appears to be a planned correction, according to the report.

At these levels, approximately 72% of Bitcoin’s supply is still in the profit zone, which falls below the 70–90% equilibrium band typical of mid-cycle consolidations. This structure suggests that the market has largely cleared out its speculative excess.

Bitfinex points to the Active Trader Realized Price of $88,500 as the next major downward reference. In past cycles, this region has been the point where selling pressure shifts to reaccumulation. While short-term upward reactions are expected, a sustained recovery requires renewed strength in institutional and retail demand.

The report also highlights rising uncertainty on the macro front. While corporate borrowing is recovering, signs of a slowdown on the employment front are growing stronger. While official data is lacking, private sector indicators suggest the US labor market is weakening faster than expected.

The ADP National Employment Report for October showed only 42,000 new jobs were created. Nearly all of the new jobs came from large corporations, while small and medium-sized businesses continued to shed employees for the third consecutive month. Consumer confidence fell 6% in November, suggesting that households are beginning to feel the effects of slowing employment and political uncertainty.

According to Bitfinex, the crypto industry has entered a new phase of mainstream adoption, driven by fast-growing stablecoin volumes and increasing global regulatory action.

In October 2025, the monthly trading volume of Ethereum-based stablecoins reached an all-time high of $2.82 trillion. This represents a 45% increase compared to the previous month. The primary drivers of this surge were investors’ shift to dollar-denominated stablecoins as the market retreated, and Ethereum’s growing Layer-2 network offered faster and cheaper transactions.

Japan’s Financial Services Agency (FSA) has approved a new stablecoin pilot involving three of Japan’s largest banks: Mizuho, MUFG, and SMBC. The program, set to launch in November 2025, aims to test digital payment systems regulated under new financial laws.

*This is not investment advice.