Deutsche Bank (DB) said that bitcoin The drop to around $80,000 on Nov. 21, about 35% below its early October peak, shows how quickly macroeconomic pressures and fragile market structure can erase cryptocurrency gains, wiping out nearly $1 trillion in value before the token recovered to $87,000.
The world’s largest cryptocurrency was priced around $86,000 at the time of this publication.
The bank attributed the decline to a combination of risk-off sentiment, expectations of higher interest rates for longer, fading regulatory momentum, weakening institutional flows and profit-taking by long-term holders, arguing that these forces have challenged bitcoin’s portfolio role and reignited its “Tinkerbell effect,” where sentiment-driven belief underpins valuation.
As stocks fell on U.S. tax concerns, renewed U.S.-China tensions and stretched AI valuations, bitcoin moved more like a high-beta tech stock than a hedge, with correlations with major indices jumping to stress-era levels, analysts Marion Laboure and Camilla Siazon wrote in Monday’s report.
Analysts also highlighted the Federal Reserve’s hawkish messaging, despite a rate cut, as a trigger that reinforced bitcoin’s negative sensitivity to changing rate expectations.
Regulatory progress has stalled, the bank noted, and delays in the CLARITY Act eroded optimism about clearer market structure and deeper liquidity.
Meanwhile, institutional flows have reversed sharply: shrinking order books have amplified liquidations, and outflows from spot exchange-traded funds (ETFs) fuel a negative liquidity cycle. Long-term holders have sold heavily as volatility spiked, adding to the pressure.
The report argues that bitcoin’s long-term maturation remains intact, but warns that uncertainty, leverage, and policy ambiguity continue to magnify drawdowns, even as eventual regulatory clarity and broader institutional adoption could support future phases of the market.
Read more: Citigroup Warns of Cooling Bitcoin Halving Season as Prices Sink and ETF Outflows Near $4 Billion
