Bitcoin News Today: Bitcoin's 36% Drop: Reset or Deeper Downturn?

Bitcoin's recent 36% drawdown has sparked renewed debate over the cryptocurrency's long-term viability, but Anthony Pompliano, founder of Professional Capital Management, remains unfazed. In a series of interviews with CNBC and other outlets, Pompliano characterized the decline as a "healthy reset" rather than the onset of a prolonged bear market, emphasizing that Bitcoin's historical volatility should temper expectations for newcomers.

Pompliano highlighted that Bitcoin has experienced 21 instances of 30% or greater price drops over the past decade, including seven declines exceeding 50%. He argued that such volatility is a hallmark of Bitcoin's maturation, noting that the Fear and Greed Index for Bitcoin recently hit an extreme low of 8, a level he described as "very, very rare" and indicative of market capitulation. "You can't stay there that long," he said, suggesting the current selloff may soon give way to a period of consolidation followed by a gradual recovery.

The analyst also pointed to reduced leverage in the market as a sign that further cascading liquidations are unlikely. Open interest and leverage levels, which peaked in early October, have since normalized, he noted. This dynamic aligns with broader observations that Bitcoin's volatility has halved in recent years, potentially capping future drawdowns at around 40%.

While retail investors have been net redeemers from Bitcoin ETFs, institutional buyers continue to accumulate. El Salvador recently purchased 1,091 BTC, bringing its total holdings to 7,474.37 BTC valued at $688 million. MicroStrategy, despite facing institutional sell-offs, added 8,178 BTC at an average cost of $102,200. Pompliano, who has increased his Bitcoin holdings annually, argued that the cryptocurrency's role as a "store of value" remains unchallenged, even as altcoins like Ethereum and Solana underperform.

The ETF landscape, however, remains turbulent. U.S. spot Bitcoin ETFs recorded $3.5 billion in outflows in November 2025, with BlackRock's IBIT-the largest fund-losing $2.2 billion. Meanwhile, Ethereum ETFs fared worse, with no significant inflows reported. Analysts at Citi linked the outflows to a self-reinforcing cycle, where redemptions exacerbate price declines, estimating a $1 billion withdrawal could trigger a 3.4% drop in Bitcoin's price.

Beyond market dynamics, macroeconomic factors loom large. The Federal Reserve's uncertain rate-cut trajectory and the absence of October economic data due to a government shutdown have fueled risk-off sentiment. Tech stocks, including NVIDIA and Microsoft, also faltered, with the Nasdaq-100 down 4% in November. Pompliano acknowledged these risks but remained optimistic, projecting Bitcoin could deliver 20–35% annual returns over the next decade-a fraction of its historic 70% compound annual growth but still outpacing equities.

Technically, Bitcoin faces critical support levels at $89,400 and $82,400, with a worst-case scenario suggesting a drop toward $45,500. Binance's Richard Teng described the 21% November decline as part of a "healthy consolidation" phase, typical of Bitcoin's 18-month correction cycles. Analysts at Deutsche Bank noted the price action reflects "fragile market structure," with thin liquidity and fading regulatory momentum contributing to the selloff.

Pompliano's bullish stance underscores a broader theme: Bitcoin's volatility, while daunting for traditional investors, is intrinsic to its value proposition. "Bitcoin will stand alone and continue to be the king of the crypto market," he asserted, emphasizing its dominance in institutional adoption and total addressable market. As the market navigates macroeconomic headwinds and technical uncertainties, the coming weeks will test whether the current reset paves the way for a new bull run-or signals deeper challenges ahead.

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