Morgan Stanley Rings the Alarm on Bitcoin's Fall—Could the Crash Get Worse?

Bitcoin slipped to around $103,000 (£78,500) this week, deepening concerns that the world's largest cryptocurrency may be entering a more turbulent phase. The latest decline has intensified scrutiny after Morgan Stanley warned that Bitcoin has now moved into its 'fall season', a period the bank associates with cooling momentum. With analysts divided over the severity of the downturn, investors are questioning how much further prices could realistically fall.

Bitcoin Drops as Major Tokens Follow Suit

According to data from CoinMarketCap, Bitcoin fell nearly 1.6% to $103,559.17 (around £79,000), while several major cryptocurrencies recorded steeper losses. Ethereum dropped 3.1% to $3,448.26 (£2,628), XRP fell 2.4% to $2.39 (£1.82), and Solana recorded a decline of more than 5%. BNB slipped 1.9% and Dogecoin dropped 2.6%, extending a broader market pullback.

Analysts say technical indicators suggest Bitcoin is trading near critical thresholds. BTC Markets analyst Rachael Lucas said resistance at $110,800 (£84,456) remains a key barrier for Bitcoin, while the 50-week simple moving average near $103,000 (£78,500) continues to act as support.

She added that large-volume selling is weighing heavily on price movements, noting that more than $45 billion (£34 billion) in Bitcoin has been offloaded by large holders since October.

Morgan Stanley Flags Bitcoin's 'Fall Season' in Four-Year Cycle

The most closely watched warning came from Morgan Stanley strategists, who highlighted that Bitcoin has historically followed a four-year cycle of three strong years followed by one weaker year. In a recent episode of the firm's podcast titled 'Crypto Goes Mainstream', Denny Galindo, an investment strategist at Morgan Stanley Wealth Management, said the cryptocurrency has entered its 'fall season'.

'Fall is the time for harvest. So, it is the time you want to take your gains,' Galindo said. He added that the main uncertainty lies in how long this period will last and when the next 'winter' phase may begin. The analogy suggests that Bitcoin may face sustained selling pressure until the cycle resets.

Not all analysts share this outlook. Arthur Hayes, chief investment officer and co-founder of Maelstrom, has argued that favourable monetary conditions may prevent a traditional bear market from forming. He said Bitcoin's long-standing halving cycle could weaken as interest rates shift and global liquidity increases.

Retail Traders Signal Bearish Sentiment

Sentiment among retail investors has also cooled. Stocktwits data showed Bitcoin sentiment in the 'bearish' zone as message volumes increased during the latest price dip. Community discussions emphasised the view that the cryptocurrency may be in the early stages of a longer corrective phase.

One user wrote that the market has become conditioned to expect a downtrend every 365 days, suggesting that traders may delay re-entering the market until 2026. Others pointed to the lack of new liquidity entering the crypto sector as a sign that the cycle peak may already be behind them.

Key Metrics Analysts Are Watching

Despite differing opinions, several trends are drawing close attention. Bitcoin's ability to reclaim resistance near $110,000 (£83,800) will be key in determining whether the downtrend deepens. Whale selling activity, institutional inflows and signals from the Federal Reserve on future rate cuts are also being tracked as potential catalysts.

With liquidity tightening and sentiment softening, analysts say Bitcoin's near-term trajectory remains uncertain as markets brace for the possibility of further declines.