Bitcoin's recent price movements have ignited a fierce debate within the crypto community, with many questioning whether the current market volatility signals the start of a bear market. Despite a significant deleveraging event in October and a notable dip from its recent peak, experts suggest that rather than a cycle top, the market is undergoing a necessary reset, poised for potential upside in the coming months.
Bitcoin's Market Crossroads: Decoding the M2 Decoupling
The recent 21% drop from Bitcoin's $126K peak and its struggle to hold above $100K have fueled bearish sentiments, particularly after a $20 billion deleveraging event. A key concern cited by the bearish camp is the apparent decoupling of BTC from the M2 global liquidity supply. However, analysts like Jesse Eckel offer a nuanced perspective. Eckel explains that while M2 tracks aggregate global liquidity, Bitcoin's response is highly sensitive to "who has liquidity." He points out that since July, the U.S. government's debt ceiling raise led to a net withdrawal of dollar liquidity from markets, directly impacting BTC's price and causing this temporary M2 decoupling. Historically, significant growth in year-over-year (YOY) liquidity in 2017 and 2021 triggered massive crypto rallies, and Eckel anticipates the M2-BTC correlation to resume with a major liquidity surge expected in 2026.
Expert Consensus: A Healthy Reset and Future Upside
Contrary to fears of a prolonged downturn, many macro analysts, including BitMEX Founder Arthur Hayes, view the October flash crash not as a cycle top but as a "healthy reset." Coinbase analysts echoed this sentiment, describing the leverage flush as a "necessary reset for crypto markets," which could "potentially set the stage for a grind higher in the months to come." This perspective is further supported by Fundstrat CIO Tom Lee, who also agreed that the October event was a needed consolidation before another upward leg. Options data further reinforces this optimistic outlook, indicating that large players are positioning for a potential dip to $90K but simultaneously anticipating a robust upside towards $160K within the next three to six months. The overall expert consensus points to continued potential upside for Bitcoin into the year-end and early 2026.
