Bitcoin Under Pressure After a Brutal Week: Key Reasons for the Sharp Drop
Bitcoin’s Recent Plunge: A Quick Overview
Bitcoin has taken a hard hit. The top cryptocurrency dropped below $80,000 for the first time since April 2025. On Monday morning, it traded around $77,500, after dipping as low as $74,900. Over the past week, it lost about 12% of its value. This wiped out over $200 billion from the total Bitcoin market.
Weekend trading made things worse. Prices fell sharply due to low trading volume. Now, traders and investors wonder: why is
Broad Market Sell-Off Hits Bitcoin Hard
Bitcoin does not move alone. It often follows risk assets like stocks. Last Friday, US stocks dropped. Tech giants led the way. Microsoft shares fell 10% after weak earnings. This bad news spread to Europe and Asia on Monday.
Even safe havens failed. Gold and silver prices kept falling. Silver had its worst day in over 40 years, down 30% on Friday. When stocks and metals both drop, Bitcoin feels the pain too.
Experts say this is a ‘risk-off’ mood in global markets. Traders pull money from risky bets like crypto. One analyst noted the drop matched wider market fears, not just crypto problems.
Forced Liquidations Amplify the Pain
What are liquidations? They happen when traders use leverage – borrowed money – to bet on price moves. If prices go against them, exchanges auto-sell positions to cover loans. This creates a chain reaction.
Since Thursday, over $2 billion in Bitcoin trades got liquidated. On Saturday alone, crypto liquidations hit $2.56 billion – the 10th biggest day ever. Long bets (expecting price up) suffered most. This flood of sales pushed prices even lower.
- Thin weekend liquidity made it worse: Fewer buyers mean small sells cause big drops.
- Cascading effect: One liquidation triggers more.
- Both long and short positions wiped out, but longs hurt Bitcoin price more.
These events show why crypto markets can swing wildly.
Investor Outflows Signal Weak Sentiment
Money is leaving crypto funds. Last week saw $1.7 billion in outflows from digital asset products. That’s two weeks in a row. Year-to-date, outflows total $1 billion.
Research heads call this a ‘big drop in investor mood.’ People are selling Bitcoin ETFs and similar products. This adds selling pressure on top of other issues.
Geopolitical Risks and Fed Chair Change Add Uncertainty
Rising global tensions are spooking markets. Tech stock falls started with Microsoft but spread wide. Precious metals, usually safe, also broke down.
Another worry: The US Federal Reserve. Kevin Warsh may replace Jerome Powell as chair. Investors watch how this could change interest rates and money policy. Tighter policy hurts risky assets like Bitcoin.
Bitcoin was once seen as a safe bet in chaos, like digital gold. But it’s down 22% over the past year. Right now, it’s acting like a high-risk stock.
Other Cryptos Follow Bitcoin Down
The pain is not just Bitcoin. Ether, XRP, and others dropped too. The whole crypto market lost value after days of selling. When Bitcoin leads, altcoins follow.
Historical Context: Past Drops Were Worse
Bitcoin has seen big crashes before. In past ‘crypto winters,’ it fell 70-80% from peaks. Its all-time high was $126,000 in October. A 70% drop from there hits $40,000.
Volatility is normal. Experts predicted swings this year, from $75,000 lows to over $200,000 highs. Markets expected ups and downs.
What’s Next for Bitcoin? Expert Views
Short-term outlooks differ. One analyst sees a bottom near $70,000. That’s a key level. Breaking below might need bigger market changes.
Others are more bearish. A top strategist predicts $40,000 this year. It could happen fast or over 6-8 months, based on past cycles.
Long-term? Bitcoin has always recovered from big drops. But timing is key. Watch for:
- Stock market rebound.
- Lower liquidations.
- Fed policy clues.
- Geopolitical calm.
If risk appetite returns, Bitcoin could bounce. But more pain is possible first.
Tips for Crypto Investors in Tough Times
Markets like this test patience. Here’s simple advice:
- Diversify: Don’t put all in Bitcoin.
- Avoid high leverage: It leads to liquidations.
- Hold long-term if you believe in crypto.
- Watch key levels: $70,000 support, $80,000 resistance.
- Stay informed on stocks, Fed, and global news.
Bitcoin’s story is far from over. After every winter comes spring.
Final Thoughts on
This brutal week shows crypto’s ties to traditional markets. From stock slumps to liquidations and outflows, many factors piled up. While short-term pain lingers, history favors recovery.
Keep an eye on prices. Will it hold $70,000 or test $40,000? Only time will tell. Stay tuned for more updates on the crypto world.
