Executive Summary: Bitcoin in Q4 2025
Q4 2025 marked a dramatic reversal for Bitcoin, delivering a -23% return—the second-worst quarterly performance in Bitcoin's history, surpassed only by Q4 2018's -42%. After reaching an all-time high of $126,000 in October, Bitcoin fell sharply to a low of $80,700 on November 22—a drawdown of over 35% from the peak—before stabilizing around $93,000-$94,000 by year-end, where it trades today.
This outcome defied Bitcoin's historical seasonal pattern, where Q4 has typically been its strongest period with an average return of 77%. The quarter was characterized by risk-off sentiment, overleveraged position liquidations, fading hopes of macro easing, and AI overvaluation fears that triggered forced selling across crypto markets.
Despite the challenging quarter, on-chain metrics suggest Bitcoin remains far from oversold territory. The MVRV Z- Score currently sits at 1.20—a neutral reading well above bear market lows (below 1) but significantly below the overheated levels of 3.7+ seen at previous cycle peaks. This indicates the market experienced a healthy correction rather than a structural breakdown.
.jpg?width=2124&height=1464&name=Chart%20Base%20(1).jpg)
Bitcoin dominance currently stands at 56.8%, with Ethereum at 11.9% and the total crypto market cap at $3.15 trillion. Bitcoin showed resilience compared to altcoins, with Ethereum declining -28% in Q4. The ETH/BTC ratio fell to approximately 0.035, reflecting Bitcoin's relative outperformance during the correction.
.jpg?width=2124&height=1404&name=Chart%20Base%20(2).jpg)
Looking forward to 2026, Bitcoin has started the year with renewed momentum—up approximately 8% since January 1st —driven by strong ETF inflows exceeding $1 billion in the first two trading days. The combination of reset valuations (MVRV Z-Score at 1.20), abating whale distribution, and renewed institutional demand suggests Q4's correction may have set the stage for the next leg higher.
