Bitcoin has spent the past several weeks trapped in a persistent decline, wiping hundreds of billions of dollars from its market value and reversing nearly a year’s worth of gains. The pullback has pushed the price far below its October all-time high of $126,000 and has dragged sentiment with it as traders search for answers. 

A detailed breakdown shared by crypto analyst Tracy Shuchart offers the clearest picture yet of why this downturn has been so aggressive. Her analysis points to a failure not driven by a single factor but by several interconnected forces that broke simultaneously and created the conditions for a cascading crash. This presents the possibility of Bitcoin extending its crash to as low as $80,000.

According to Tracy Shuchart, Bitcoin’s climb from $40,000 to $126,000 was powered based on one dominant theory: a Federal Reserve easing cycle combined with a wave of institutional participation through spot ETFs. 

Traders priced in a supportive macro backdrop where rate cuts were all but guaranteed, liquidity would expand, and institutions would steadily absorb supply. However, once the Federal Reserve reversed course, the foundation of that theory collapsed.

Expectations for December rate cuts fell from 90% to 40%. Real yields on short-term Treasuries stayed elevated above 5%, and the strong-dollar environment returned. With the macro assumption gone, Bitcoin’s valuation near all-time highs became difficult to justify. 

Institutions that had accumulated through Spot ETFs quickly reduced exposure, producing more than $1.1 billion in outflows within days. This wasn’t panic selling but a systematic rebalancing by portfolio managers who no longer believed the macro thesis. 

This change in macro expectations effectively removed the first layer of support that had been holding Bitcoin above six-figure levels.

The second layer of the decline came from the behavior of long-term holders. Wallets that accumulated bitcoin between $40,000 and $80,000 began distributing aggressively once volatility returned. They offloaded roughly 815,000 Bitcoin in thirty days, locking in substantial profits. 

Shuchart’s argument is based on the notion that the ongoing decline persists because the market has now reached a point where natural buyers have vanished. Institutions are rebalancing away from risk, long-term holders are waiting for deeper discounts, and retail traders have retreated. Until there’s new demand, Bitcoin’s price will continue drifting lower.

“Now the market is repricing based on reality: high real yields, no Fed easing, strong dollar environment,” the analyst said.

For a bottom to form, three conditions must be met. Leverage must be completely flushed out of the system, long-term holders need to stop selling and begin accumulating again, and real capital must find the price attractive enough.

As it stands, Bitcoin is still trading above the $90,000 price level. However, recent price action saw it briefly slip below that threshold on November 18, touching lows near $89,000 before recovering. That move shows that the downtrend is already probing for lower support in the $80,000 zone. At the time of writing, Bitcoin is trading at $91,080.

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