Deutsche Bank asserts that the recent Bitcoin slide does not represent a market collapse, but rather a BTC in a reset phase of structural nature. According to the German lender, the retreat responds to sustained institutional capital outflows, thinning liquidity, and stalled legal frameworks, marking a necessary maturation period for the asset following years of highly speculative gains.
Analysts Marion Laboure and Camilla Siazon point out that the asset has lost its historical correlation with gold and traditional equities. This phenomenon, positioning BTC in a reset phase, has left the asset vulnerable in a risk-off environment, causing four consecutive months of steady declines not seen since the pre-pandemic era.
Institutional factors and the weakening of market liquidity
The report highlights that the most immediate pressure comes from massive sell-offs in United States spot exchange-traded funds (ETFs). Consequently, the leader cryptocurrency has suffered outflows exceeding $3 billion in January alone, drastically reducing trading volumes and leaving the price at the mercy of swings that are much more aggressive and volatile than before.
Furthermore, retail investor interest seems to have cooled significantly, with adoption dropping to 12% from the 17% recorded in mid-2025. Nevertheless, this pullback from the October peaks suggests that the market is flushing out speculative excess, seeking to establish a much more solid floor and a real basis for the next organic growth cycle.
How does regulatory uncertainty influence the current price volatility?
Legislative paralysis in Congress regarding the Digital Asset Market CLARITY Act has reignited financial instability across the sector. Thus, Bitcoin’s volatility has surged back above 40%, as the lack of a clear legal framework for stablecoins has deterred the entry of new capital, complicating any attempt at a sustained recovery in the near term.
On the other hand, while gold has rallied 60% over the last year, Bitcoin has posted a negative return of 6.5%, temporarily invalidating its safe-haven narrative. However, Deutsche Bank cautions that the asset remains 370% higher than in early 2023, underscoring the ecosystem’s underlying resilience despite the current erosion of conviction among market participants.
Despite the “extreme fear” sentiment currently reflected in the market, this purging of weak hands could prove beneficial. Likewise, the fact that it is trading below ETF cost levels suggests the price is nearing a critical support zone, where institutional maturity will be tested before resuming a definitive and consolidated upward trajectory.
