By skyforbes 
Bitcoin, just over a month after hitting a historical high, has erased its gains of over 30% since the beginning of the year. The recent cooling of AI tech stocks has led to a decline in overall risk appetite, with Bitcoin funds being the first to exit. Additionally, people believe in Bitcoin’s four-year cycle and are rushing to sell Bitcoin before the bear market arrives, with the fear-greed index falling back to the extreme fear zone.
Bitcoin’s Gains This Year Completely Wiped Out!
Since the beginning of this year, Bitcoin’s price has fluctuated violently, causing investors great distress. In April, following U.S. President Trump’s announcement of additional tariffs, Bitcoin’s price once fell to a low of $74,508, then rebounded to a historical high of $126,199, but recently pulled back again, falling below last year’s closing price on Sunday, with this year’s performance completely wiped out!
Market Risk Aversion High, Bitcoin Funds First to Exit
The recent cooling of AI tech stocks has led to a decline in overall risk appetite. Matthew Hougan, Chief Investment Officer of Bitwise Asset Management, said that overall market risk aversion is high, and cryptocurrencies are like the canary in the coal mine, the first to sound the alarm.
For most of this year, institutional investors have been the pillars of Bitcoin’s legitimacy and price. Bloomberg data shows that ETFs have absorbed over $25 billion in funds overall, pushing Bitcoin’s asset scale to as high as about $169 billion at one point. Their stable fund inflows have helped Bitcoin redefine its position as a portfolio diversification tool: a hedge against inflation, currency devaluation, and political turmoil. But this inherently fragile narrative is now shaking again, exposing the market to a more subtle but equally destructive factor: fund outflows.
Four-Year Cycle Approaching! People Rushing to Sell Bitcoin
Bitwise CEO Hunter Horsley bases his view on Bitcoin’s four-year cycle phenomenon. Because people believe in the four-year cycle, thinking that Bitcoin’s price will fall in 2026, they are selling in 2025 to avoid the down market year. But he believes this pattern is based on the old era of cryptocurrencies. Since the launch of Bitcoin ETFs and the new management taking office, we have entered a completely new market structure: new participants, new dynamics, new reasons for buying and selling. Horsley believes we have likely already experienced a bear market for nearly six months and are about to exit it.
However, from the perspective of market sentiment, the fear-greed index has fallen back to the extreme fear zone, and there currently seem to be no obvious bullish catalysts appearing.
Disclaimer: None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy.