Bitcoin’s rollercoaster year shows signs of ending on a low note, with the world’s leading cryptocurrency struggling to regain momentum after October’s massive crash.

Analysts warn that its growing ties with stock markets and AI-driven volatility could cap gains for the rest of 2025.

This year, Bitcoin reached unprecedented highs and dramatic lows, reflecting a volatile global market. In early October, Bitcoin soared above $126,000 following a surge in retail and institutional adoption. But just days later, new tariffs and export threats from U.S. President Donald Trump triggered over $19 billion in liquidations—the largest in crypto history.

Since then, Bitcoin has struggled to recover. November marked its largest monthly decline since mid-2021, leaving traders uncertain about the token’s year-end performance. As of Monday, Bitcoin hovered around $89,000.

Rising correlation with equities

Historically considered an alternative investment, Bitcoin is increasingly moving in tandem with global stocks. Analysts say retail and institutional investors are driving this closer correlation, linking crypto prices more directly to equity market sentiment.

Data from LSEG shows Bitcoin’s average correlation with the S&P 500 rose to 0.5 in 2025, up from 0.29 in 2024. Similarly, its correlation with the tech-heavy NASDAQ 100 jumped to 0.52 from 0.23 last year. Analysts note that AI stocks have contributed significantly to these swings due to their speculative nature and influence on broader equity markets.

“Crypto reacting to broader equities has been a consistent theme in 2025,” said Jasper De Maere, desk strategist at crypto algorithmic trading firm Wintermute.

Influence of federal reserve policy

Interest rate expectations also play a growing role in Bitcoin’s price movements. While historical data shows little direct impact, dovish signals from the Federal Reserve often coincide with crypto rallies. Conversely, hawkish cues in October weighed on Bitcoin’s recovery.

Market pricing indicates an 86% probability of a 25-basis-point Fed rate cut this week, a key factor likely to influence short-term crypto trends.

“The Fed’s support of monetary supply in this particular scenario is going to be an indicator that crypto is all looking at,” said Mo Shaikh, co-founder and general partner at Maximum Frequency Ventures.

Analyst forecasts and investor sentiment

Bitcoin bulls, including Michael Saylor’s Strategy, had projected a peak of $150,000 this year. Analysts at Standard Chartered once forecasted $200,000. However, following the October crash, expectations have tempered, with Strategy CEO Phong Le cautioning about a possible “Bitcoin winter.”

Traders currently assign a 15% probability that Bitcoin will close the year below $80,000, a slight improvement from earlier projections of 20%, reflecting lingering market uncertainty.