Bitcoin is down primarily due to a combination of macroeconomic uncertainty, geopolitical tensions, and market-specific factors. Currently, Bitcoin's price has dropped about 4.5% in the past day, trading near $105,700, while the overall cryptocurrency market capitalization has decreased by about 4.9% to $3.67 trillion. This downturn involves widespread declines across almost all major cryptocurrencies. Key reasons for the drop include:

1. Geopolitical and Trade Tensions: Heightened trade tensions between the U.S. and China have led to fears of increased tariffs and export controls, negatively impacting global markets, including cryptocurrencies. This includes President Trump's threats of escalating tariffs and China's export restrictions on critical materials, causing broader economic uncertainty.
2. Market Liquidations and Panic Selling: There has been a wave of significant liquidations in the crypto market exceeding $19 billion, contributing to price volatility and a market panic. The recent drop below important price support levels like $99,900 could trigger deeper corrections.
3. U.S. Domestic Issues: The ongoing U.S. government shutdown has further fueled investor anxiety, leading to more cautious trading and asset sell-offs to mitigate risks.
4. ETF Outflows and Institutional Sentiment: Bitcoin spot ETFs have seen notable outflows recently, signaling some waning institutional interest or profit-taking.
5. Technical Factors: Bitcoin has faced resistance near the 50-day moving average and is testing support around the 200-day moving average, technical levels critical for its short-term price direction.

Despite the short-term volatility and bearish sentiment (marking a fear zone not seen since April), some analysts highlight Bitcoin's growing role as a functional asset within decentralized finance and its potential adoption as part of the mainstream financial system, which could support longer-term stability. In sum, Bitcoin's recent decline is driven by a mix of global economic uncertainty, geopolitical risks, market liquidation pressures, and technical challenges, with its price reflecting investor caution amid these complex factors in October 2025.