Bitcoin’s sharp pullback over the past month has sparked countless theories — from the recent US government shutdown to fears of an overheating artificial intelligence sector. But according to multiple crypto analysts, neither explanation holds up under scrutiny.

Bitcoin (BTC)
$92,295
recently fell to its lowest level in almost eight months, triggering speculation that macroeconomic uncertainty was spilling over into crypto markets. Many pointed to the 43-day US government shutdown, which ended last week, as a contributing factor. Others argued that growing anxiety around a potential AI bubble was prompting investors to reduce exposure to risk assets, including Bitcoin.

Victoria Scholar, head of investment at Interactive Investor, echoed this view:

“Fears of an AI bubble and concerns about the market’s heavy dependence on a handful of tech giants have caused investors to dial back their exposure to speculative assets such as Bitcoin.”

Yet on-chain data analysts remain unconvinced.

🔵 US Shutdown Theory “Doesn’t Hold Water,” Analyst Says

In a newly published YouTube interview, on-chain analyst Rational Root rejected the idea that the government shutdown meaningfully impacted the Bitcoin market.

“I wouldn’t attribute the Bitcoin drawdown primarily to the government shutdown,” Root said.

Instead, Root argues that the decline from October’s all-time high of $125,100 was driven overwhelmingly by one factor:

👉 Excessive futures leverage in Bitcoin markets.

When leverage reaches extreme levels, even small corrections trigger cascading liquidations, which amplify downside pressure.

🔵 It’s Not the AI Bubble Either

Veteran analyst PlanB also disputed claims that AI-driven market fear is dragging Bitcoin lower.

“We can remove the AI bubble thesis from the list of reasons Bitcoin is down,”
PlanB wrote on X after Nvidia reported blockbuster quarterly earnings.

📈 Nvidia’s Q3 earnings (for quarter ending Oct. 26):

• $57 billion in revenue

• 62% year-over-year growth

• Above Wall Street expectations of $54.7 billion

If AI fears were truly dragging markets lower, analysts contend, Nvidia’s results would not have shattered expectations.

PlanB added that the list of potential explanations for Bitcoin’s slump is now “getting smaller and smaller.”

🔵 Only Two Plausible Reasons Remain

PlanB believes only two broad explanations still make sense:

1. The four-year halving cycle narrative is breaking

2. Global liquidity expansion is slowing

The first has become a point of major industry debate.

Swan Bitcoin CEO Cory Klippsten recently argued that institutional adoption may have fundamentally altered Bitcoin’s long-established boom-and-bust cadence:

“There is a very good chance that Bitcoin’s famous four-year price cycles are over, killed by institutional adoption.”

The second factor — global liquidity — is widely considered one of Bitcoin’s most important long-term drivers.

Strike CEO Jack Mallers summarized it bluntly:

“Bitcoin is the most sensitive asset to liquidity. It reacts first. It is a truth machine.”

🔵 Bitcoin Just Got a “Hard Reset,” Creating Room for the Next Leg Up

Despite the market’s weakness, Rational Root sees opportunity rather than danger.

“In the last three years of this bull market, Bitcoin has now experienced three resets comparable to bear-market conditions,” Root explained.
“Each reset has cleared excesses and allowed the market to move higher.”

With leverage flushed and funding rates normalizing, Root believes the market is transitioning into a healthier structure:

👉 “Bitcoin is positioned to move upward again — but in a more gradual, sustainable way.”

🔵 Could the End of the US Shutdown Accelerate ETF Approvals?

Several analysts believe the reopening of the US government could indirectly ignite a new wave of crypto ETF approvals, particularly in 2026, as the SEC returns to normal operations.

A number of pending filings — including Bitcoin, Ether, and multiple altcoin ETFs — could set the stage for another institutional inflow cycle.

Conclusion

Analysts now agree on several key points:

❌ Bitcoin’s drop is not caused by the US government shutdown
❌ It is not caused by fears of an AI bubble
❌ It is not tied to tech sector weakness

Instead, the decline can be attributed to:

✔ Excessive futures leverage
✔ Slowing global liquidity
✔ A shifting market structure no longer governed solely by the four-year cycle

With leverage reset and macro conditions stabilizing, the sharp pullback may ultimately represent:

⭐ A necessary reset — and the setup for Bitcoin’s next major rally.