Emre Yumlu 
Bitcoin (BTC)’s sharp downturn in recent weeks has sparked widespread debate across the crypto ecosystem. While many observers have pointed to the recent U.S. government shutdown or fears surrounding an emerging AI-driven tech bubble, on-chain analysts argue that neither narrative accurately explains the severity of the drop.
Bitcoin Fall: Macro Headlines Are Not to Blame
Bitcoin’s slide to its lowest level in nearly eight months has frequently been linked to uncertainty stemming from the temporary U.S. government shutdown. Others have suggested that concerns about an overheated artificial intelligence sector have dampened risk appetite, spilling over into digital assets.
However, on-chain analyst Rational Root countered these claims in a recent podcast, stating that the decline had little connection to political or technological fear cycles. According to Root, the primary trigger was the excessive amount of futures leverage that had accumulated as Bitcoin hovered near its all-time high of $125,100 in October. The analyst emphasized that AI-related market anxiety had no measurable impact on the move either.
Supporting this view, analysts such as PlanB and PlanC noted that Nvidia’s record-breaking $57 billion in quarterly revenue undermines the argument that weakness in AI-linked stocks is dragging crypto lower.
Two Drivers Remain: Liquidity and the Bitcoin Four-Year Cycle
With other theories fading, analysts argue that only two credible macro factors remain: tightening global liquidity and the long-standing debate around Bitcoin’s four-year cycle.
PlanC highlighted that the traditional post-halving cycle may be weakening, especially as institutional participation continues to reshape market structure. Meanwhile, many analysts are watching indicators tied to the global money supply, particularly M2, which currently points to a contraction in liquidity. Strike CEO Jack Mallers has repeatedly described Bitcoin as the asset most sensitive to liquidity shifts, noting that it often reacts before traditional markets.
A Potential “Reset” for the Market
Despite recent turbulence, Rational Root believes the decline may ultimately be constructive. The analyst explained that the market has experienced three significant reset moments over the past three years, each of which paved the way for renewed upward movement. A more measured and structured recovery may now be possible.
Some market watchers also speculate that as the U.S. government returns to a normal legislative calendar, momentum for new crypto ETF approvals could accelerate heading into 2026. Still, analysts note that the list of meaningful short-term price drivers has narrowed considerably.
Also, you can freely share your thoughts and comments about the topic in the comment section. Additionally, please follow us on our Telegram, YouTube and Twitter channels for the latest news and updates.