Bitcoin Extended Losses as Investors Brace for Broader Market Weakness
Bitcoin’s downward trajectory continued Monday, with the world’s leading cryptocurrency falling below the $80,000 mark for the first time since April 2025. The digital asset was trading at approximately $77,494.65 at the start of the week, according to CoinMetrics, after experiencing a brief dip to $74,876. This downturn represents a significant 12% decline over the past seven days, erasing over $200 billion in market capitalization.
The cryptocurrency’s retreat mirrored a broader risk-off sentiment sweeping across global financial markets. Analysts point to a confluence of factors contributing to the sell-off, extending beyond crypto-specific events.
“Bitcoin’s drawdown coincided with a broader risk-off shift across global markets and was amplified by structurally thin weekend liquidity, rather than by crypto-specific developments or signs of fundamental stress,” observed Dessislava Ianeva, a research analyst at crypto exchange Nexo.
This correlation with traditional risk assets was evident as U.S. stocks also experienced a decline on Friday. Tech giants, including Microsoft, saw significant drops following disappointing earnings reports, which subsequently cast a shadow over European and Asian markets on Monday. Precious metals, often considered safe-haven assets, also succumbed to selling pressure, with gold and silver extending their losses. Silver, in particular, registered its worst day since March 1980, plummeting 30% on Friday.
The sharp decline in Bitcoin’s price was exacerbated by forced liquidations. Data from Coinglass indicates that over $2 billion in Bitcoin long and short positions have been liquidated since Thursday. Such cascading liquidations can accelerate price downturns in crypto markets as traders’ positions are automatically closed out.
Investor sentiment appears to be wavering, with digital asset investment products recording outflows for a second consecutive week, totaling $1.7 billion. Year-to-date outflows have now reached $1 billion, signaling a “marked deterioration in investor sentiment towards the asset class,” according to James Butterfill, head of research at CoinShares.
Adding to the uncertainty is the upcoming transition at the Federal Reserve, with Kevin Warsh set to succeed Jerome Powell as chair. This leadership change introduces another layer of macroeconomic consideration for market participants.
Yuya Hasegawa, an analyst at Japanese crypto firm Bitbank, suggested that the recent Bitcoin sell-off was likely driven by a combination of rising geopolitical risks, the decline in tech equities triggered by events like Microsoft’s earnings, and the weakness observed in precious metals, which have served as a refuge for investor capital.
While Bitcoin has been an active performer in periods of market volatility, its performance over the past year has been muted, with a decline of approximately 22%.
Could Bitcoin’s decline continue?
Market participants have anticipated increased volatility in Bitcoin throughout the year, with price predictions ranging widely from $75,000 to over $200,000. Hasegawa posits that a potential short-term bottom for Bitcoin might be forming around the $70,000 level, serving as a critical reference point. A sustained move significantly below this threshold, he suggests, would likely necessitate a more substantial recalibration of market conditions.
However, some analysts hold a more bearish outlook. John Blank, chief equity strategist at Zacks, has forecast that Bitcoin could reach $40,000 this year. He believes this could occur rapidly or more gradually over the next six to eight months, a projection based on the analysis of previous market cycles. Historically, Bitcoin has experienced drawdowns of 70% to 80% from its all-time highs during “crypto winter” periods. Given its record high of $126,000 in October, a fall to $40,000 would represent a roughly 70% plunge.
Other cryptocurrencies, including ether and XRP, also experienced significant declines on Monday, following the broader market sell-off. Saturday alone saw liquidations across the cryptocurrency market totaling $2.56 billion, marking it as the tenth-largest single-day liquidation event on record, according to Coinglass.
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