Bitcoin Price Recovery Could Take Months Following Major Selloff, According to Analyst

ETF Outflows Put Pressure on Bitcoin as Market Seeks New Direction

In the wake of Bitcoin’s dramatic price correction, cryptocurrency markets are navigating uncertain territory as investors reassess their positions and analysts attempt to forecast the path to recovery. Prominent cryptocurrency analyst Timothy Peterson has offered a sobering timeline for Bitcoin’s potential return to record highs, citing significant selling pressure from institutional investors and a cooling demand environment that could extend the recovery period well into 2025.

$4.6 Billion in ETF Outflows Creating Substantial Headwinds

Peterson’s analysis reveals a concerning trend: approximately 51,000 Bitcoin have been sold from United States-based exchange-traded funds (ETFs) since October 9th, representing roughly $4.6 billion in outflows during a period when Bitcoin was trading near the $90,000 level. This substantial selling pressure has contributed significantly to the recent market downturn, undermining the momentum that had previously driven Bitcoin to historic price levels.

“The market is experiencing an adjustment phase as institutional capital recalibrates its exposure to digital assets,” explains Peterson. “These ETF outflows represent a meaningful shift in capital allocation that cannot be quickly absorbed without price impact.”

The cryptocurrency market has historically demonstrated sensitivity to large capital movements, with institutional investors now playing an increasingly significant role in market dynamics. Since the approval of spot Bitcoin ETFs by the Securities and Exchange Commission earlier this year, these investment vehicles have become crucial barometers for measuring institutional sentiment toward digital assets.

Recovery Timeline Extends as Demand Signals Weaken

Based on historical patterns and current market conditions, Peterson projects that Bitcoin could take a minimum of 10 weeks to reclaim its all-time high price levels. However, his more realistic assessment suggests a recovery period closer to 14 weeks as the market gradually rebuilds momentum. This timeline is predicated on average weekly ETF inflows of approximately $450 million continuing through 2025, though recent data indicates potential challenges to this assumption.

“ETF inflows have remained nearly flat over the past two weeks, signaling persistent weakness on the demand side,” Peterson notes. “Without renewed buying interest from institutional investors, the recovery process could extend beyond initial projections.”

Market analysts have observed that cryptocurrency price movements have demonstrated high correlation with fund flows, particularly those associated with regulated investment products like ETFs. This relationship has become increasingly pronounced as traditional finance continues its integration with digital asset markets, creating new dynamics that influence price discovery and volatility patterns.

Network Value Indicators Signal End of Market Froth

Adding further context to his analysis, Peterson highlighted that Bitcoin has fallen below a key threshold for its long-term network value, commonly referred to as the Metcalfe valuation. This technical indicator, which attempts to measure the intrinsic value of the network based on user adoption and utility, suggests the asset has moved from potentially overvalued territory to a more sustainable price level.

“For the first time in almost two years, Bitcoin’s price has dropped below its Metcalfe valuation,” Peterson explained. “While this doesn’t necessarily signal a market bottom, it does indicate that much of the leveraged positioning and speculative froth has been cleared from the system.”

This technical development could potentially offer some reassurance to long-term investors concerned about market stability. Historically, periods following significant corrections have often provided more sustainable foundations for future growth, as speculative excess diminishes and value-based investment approaches gain prominence.

Market Participants Reassess Strategy Amid Shifting Landscape

As the Bitcoin market navigates this correction phase, both retail and institutional investors are reassessing their digital asset strategies in light of changing macroeconomic conditions and sector-specific developments. The cryptocurrency market’s maturation has introduced new correlations with traditional financial markets, creating more complex investment considerations than in previous market cycles.

Regulatory developments, technological advancements in blockchain infrastructure, and evolving institutional frameworks for digital asset custody all continue to influence market sentiment alongside pure price action. These fundamental factors may ultimately play a decisive role in determining the pace and sustainability of Bitcoin’s recovery trajectory.

“We’re witnessing the market digest not just technical selling pressure, but also evolving narratives around cryptocurrency’s place in the broader financial ecosystem,” notes Peterson. “These periods of price discovery often lead to more resilient market structures over the long term.”

Cautious Outlook Prevails as Market Seeks New Equilibrium

While Peterson’s analysis provides valuable perspective on potential recovery timeframes, he emphasizes that market participants should maintain realistic expectations about near-term price performance. The combination of recent ETF outflows, moderating demand signals, and technical indicators suggests a period of consolidation may be necessary before Bitcoin can challenge previous price records.

“Markets rarely move in straight lines, and recovery patterns typically include multiple phases of accumulation and distribution,” Peterson concludes. “Patient investors who understand these cyclical patterns may find opportunity in this transitional period, though careful risk management remains essential.”

As with all financial markets, cryptocurrency investors are reminded that historical patterns provide context but not certainty. The evolving regulatory landscape, technological developments, and macroeconomic factors all contribute to a complex market environment that continues to mature with each market cycle. While Peterson’s analysis offers valuable insights into potential recovery timeframes based on current data, market participants are encouraged to conduct their own research and consider multiple scenarios when formulating investment strategies.

This article does not constitute investment advice. All investments in cryptocurrency markets involve significant risk, and investors should consult with qualified financial professionals before making investment decisions.