5 Drivers Behind Bitcoin’s 31% Selloff, Says Deutsche Bank
Deutsche Bank strategists identify five key factors driving the Bitcoin selloff. First, a broad decline in global risk appetite has tied BTC price movements to equities. Second, uncertainty over the Federal Reserve’s policy trajectory has increased volatility. Third, stalled progress on crypto regulation has hampered institutional adoption. Fourth, institutional outflows from Bitcoin ETFs have thinned liquidity, amplifying price swings. Finally, long-term holders are taking profits, marking a shift from previous corrections. Bitcoin’s price has plunged 31% from its October 6 all-time high of $126,272 and saw its worst weekly loss since February. At the time of writing, BTC trades around $85,933. Deutsche Bank’s renewed “Tinkerbell effect” warns that wavering investor belief could prolong the selloff. Traders should monitor regulatory signals and institutional flows for potential market stabilization.
Bearish
The analysis categorizes the news as bearish for cryptocurrency markets. Deutsche Bank’s identification of five selloff drivers underscores weakening investor confidence and risk sentiment. The tie between BTC and equities, along with Fed policy uncertainty and stalled regulation, suggests continued downside pressure. Institutional outflows and profit-taking by long-term holders further erode liquidity and signal reduced buying support. Similar to earlier episodes where ETF redemptions and regulatory delays triggered deeper corrections, this convergence of factors could extend short-term declines. Traders should brace for volatility, though long-term recovery may hinge on clearer regulatory frameworks and improved risk appetite.