Bitcoin has just weathered a brutal correction, shaking up portfolios. However, the most publicized explanations - the US shutdown and AI-driven algorithmic trading - may just be red herrings in this scenario.
Industry experts emphasize one key point: volatility remains an intrinsic characteristic of Bitcoin, not an anomaly to be explained by temporary external events. This price decline fits within the natural cycles that BTC has experienced since its inception.
Onchain data reveals that current movements correspond to classic profit-taking after a period of gains. Long-term investors continue to accumulate while short-term traders adjust their positions. This dynamic mechanically creates temporary bearish pressure, without needing to invoke the shutdown or AI.
The observed volatility remains within Bitcoin’s historical averages. Technical analysts note that BTC is still moving within its medium-term bullish trend, with key support levels holding firm despite the correction.
Attributing the decline to the US government shutdown is more a matter of coincidence than causality. Crypto markets operate 24/7 and are largely disconnected from US administrative machinery in the short term. Potential regulations can certainly influence sentiment. But a temporary halt to federal services has never constituted a direct bearish catalyst for Bitcoin.
Regarding artificial intelligence, analysts also dismiss this explanation outright. Trading bots have existed for years in the crypto ecosystem and represent nothing new. Their impact on volatility is integrated into the normal functioning of markets. Pointing fingers at AI means ignoring that human trading volume remains largely dominant.
The real explanatory factors lie in global macroeconomics, institutional flows, and the very structure of the Bitcoin market. Liquidity data, derivatives positions, and halving cycles constitute far more relevant variables for understanding price movements.
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Gaston has been a writer for over 7 years and a passionate cryptocurrency enthusiast since 2020. He loves exploring the crypto ecosystem and is now dedicated to sharing his insights and discoveries through InvestX.
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