Bitcoin’s struggle to surpass $90,000 seems to be more than just a battle of narratives; it appears to be a test of the market’s infrastructure.
In 2025, the prevailing narrative revolved around institutional momentum. The US government was moving towards establishing a regulatory framework, culminating in the GENIUS Act signed by President Donald Trump to federalize payment stablecoins. Additionally, spot Bitcoin ETFs were gaining traction in brokerage channels, signaling the crypto economy’s integration into mainstream asset classes. This surge led Bitcoin to reach an all-time high of $126,223 in early October.
However, a significant market downturn on Oct. 10 wiped out approximately $20 billion in leveraged positions across crypto platforms, causing Bitcoin’s price to plummet by 30% from its peak. This marked the first red October for Bitcoin in several years. Since then, the market has been struggling due to reduced liquidity, lower trading volumes, and major holders selling during rebounds.
The aftermath of the Oct. 10 crash reshaped the risk appetite of liquidity providers, leading to tighter risk limits and reduced shock absorption in the market. This shift is evident in the behavior of large holders, who continue to sell off significant amounts of Bitcoin. Data from CoinDesk Data shows a sharp decline in centralized exchange activity, with spot and derivatives volumes decreasing significantly.
The market’s depth, which measures visible buy and sell interest near the mid-price, has also decreased. This decline in liquidity makes it harder for institutional strategies to execute trades without incurring significant costs. The migration of liquidity away from visible exchange order books, coupled with regulatory changes allowing in-kind creations and redemptions for crypto ETP shares, has further complicated the market dynamics.
Despite being a widely held asset by institutions, Bitcoin’s fragile mechanics are becoming more apparent. Private liquidity, which is not publicly displayed during times of panic, adds to the market’s vulnerability. As stress mounts, spreads widen, sizes decrease, and activity shifts back to public venues when public depth is at its weakest.
Overall, Bitcoin’s struggle to break past $90,000 reflects deeper issues within the market structure, highlighting the importance of robust liquidity and market plumbing.
