Bitcoin has faced a significant downturn, dropping below the $70,000 mark for the first time in 15 months amidst prevailing risk-off sentiment that has affected global markets. The leading cryptocurrency fell as low as $69,821 during early New York trading on Thursday, marking its lowest point since the early days following Donald Trump’s election victory in November 2024.
Over the past months, Bitcoin has experienced a dramatic decline, shedding over 44% from its height in October of the previous year. This most recent decline has been characterized as a “crisis of faith” by Shiliang Tang, managing partner at Monarq Asset Management. The initial phases of this downturn were largely driven by liquidations specific to the crypto market, but the current pressures are rooted in broader market instability affecting various asset classes. According to data from Coinglass, approximately $722 million in bullish positions across cryptocurrencies were liquidated within a single day.
Wenny Cai, chief operating officer at trading platform SynFutures, highlighted the recent heavy liquidations and the shift in sentiment towards risk aversion. She indicated that while this does not suggest an end to institutional participation, it signifies a departure from previous market complacency. Synchronized selling was observed across multiple markets, with the Nasdaq 100 down over 2%, leading losses in sectors including software and semiconductors, as concerns over rising interest rates continued to spread.
Cryptocurrency sentiment has plummeted to extreme fear, with Andrew Tu, head of business development at Efficient Frontier, warning that if Bitcoin fails to hold at $72,000, it may drop further to $68,000 or even revisit the lows from 2024. Amidst this turmoil, the inflows into U.S.-listed Bitcoin exchange-traded funds (ETFs) have fluctuated, with about $562 million entering on Monday but over $800 million exiting in the subsequent sessions, according to Bloomberg data.
Additionally, skepticism about Bitcoin’s effectiveness as a safe haven during times of market distress has risen, particularly as the token has declined nearly 20% this year alone. The broader cryptocurrency market has lost more than $460 billion in value within the past week, reflecting ongoing volatility and uncertainty within the sector.