The recent downturn in the cryptocurrency market has raised critical questions about the future trajectory of Bitcoin. As the leading digital asset fell below $90,000, many are pondering whether this signals the onset of a bear market. However, Jason Huang, founder of analytics firm NextGen Digital Venture (NDV), argues that this decline is primarily a liquidity-driven correction rather than a fundamental trend reversal.
Huang attributes the significant 30% pullback to a combination of factors including excessive leverage liquidations, macroeconomic uncertainties, recent tariff announcements from former President Trump, and a slowdown in spot ETF inflows. Data provided by Tiger Brokers indicates that Bitcoin temporarily dipped under the $90,000 mark, erasing its gains from 2025 and leaving its year-to-date return around -2%.
After reaching a peak of $126,000 in early October, Bitcoin faced its largest liquidation day recorded on October 10th, where approximately $20 billion in leveraged positions were liquidated. Despite a recovery above $110,000 post-drop, the asset has seen a substantial 30% loss in value over the past six weeks.
Huang maintains that this decline should not be overstated in terms of long-term implications. He highlights the decreasing supply of Bitcoin every four years as a crucial factor. In the 2008-2012 cycle, 10 million new BTC were mined, whereas only around 600,000 will be produced in the current cycle, leading Huang to argue that the selling pressure has diminished structurally.
Additionally, Huang points to the potential sale of 60,000 BTC seized by UK authorities as a contributing factor to current market pressures. He stated, “If it weren”t for that tweet, I think Bitcoin would be in the $130,000–$150,000 range today.”
From a technical perspective, the price falling below the 200-day moving average, coupled with the formation of a “death cross,” has intensified selling pressure. The decline in ETF inflows and ongoing global liquidity contraction also play a role in this short-term market stress.
Huang notes that Bitcoin shows a correlation of up to 70% with the Nasdaq during periods of market fear, with its volatility being approximately twice that of the stock market. He emphasizes that upcoming US employment data and earnings results from companies like Nvidia will be pivotal in determining market direction.
According to NDV”s strategy, there is a rotation between Bitcoin and Ethereum, with a preference for adjusting weight between Bitcoin-related stocks and gold as a hedge against the dollar. Given the current market positioning, which leans heavily toward short positions, a rebound to the $98,000-$99,000 range is considered plausible during a natural deleveraging process. Huang suggests that in the long run, new highs above $100,000 and even multi-million dollar targets are within the realm of possibility.
