Bitcoin’s recent drop in price appears to be unaffected by the recent U.S. government shutdown or concerns surrounding an AI bubble, analysts suggest.

Market speculation had framed Bitcoin’s decline — the lowest in nearly eight months — as a reaction to macroeconomic uncertainties.

Victoria Scholar, the head of investment for Interactive Investor, commented that these AI bubble fears and the reliance on major tech firms have prompted investors to reduce their stakes in speculative assets, including Bitcoin.

“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.”

Nonetheless, analyst Rational Root dismissed the connection to the U.S. shutdown during a podcast.

“I wouldn’t contribute the drawdown in Bitcoin all to the shutdown of the government.”

Root attributed Bitcoin’s fall from its peak of $125,100 in October to excessive futures leverage.

Concerns about the AI Bubble

Bitcoin analyst PlanB also rebutted the notion that AI issues were impacting Bitcoin’s price. In a tweet, he stated that the AI Bubble theory should be eliminated from considerations regarding Bitcoin’s decline, highlighting that Nvidia had reported robust earnings.

On the same day, Nvidia announced a record revenue of $57 billion for the third quarter, surpassing projections by Wall Street.

PlanB emphasized that options for explaining Bitcoin’s downturn are becoming fewer.

Fewer Explanations for Bitcoin’s Drop

PlanB mentioned that only two key factors may remain: the cyclical narrative of four-year periods and the impact of global liquidity. He noted that the cyclical narrative may be at risk of breaking.

Cory Klippsten from Swan Bitcoin pointed out that the anticipated four-year price cycles of Bitcoin could be nullified by institutional adoption.

The conversation regarding global liquidity, often monitored through the M2 money supply, remains significant within the Bitcoin community. Jack Mallers from Strike remarked that Bitcoin is highly responsive to changes in liquidity.

Time for a Bitcoin Reset

Rational Root stated that Bitcoin is currently at a “clean slate” stage, indicating potential opportunities for upside growth. He noted, “We have experienced resets comparable to bear market levels during this three-year bull market, and these resets often let us move higher.”

Some analysts are hopeful that the U.S. ending its shutdown could lead to new crypto exchange-traded fund approvals from the SEC in 2026.

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*Magazine: Crypto carnage — Is Bitcoin’s 4-year cycle over? Trade Secrets *