Bitcoin Hits New Low Below $80,000
Bitcoin has recently dropped below $80,000, reaching its lowest point since November 2024. This decrease comes as the entire crypto market faces a significant downturn, showcasing a period of high volatility.
$1 Trillion Market Loss
- Bitcoin experienced an 8% decline in the last 24 hours, with the price briefly touching $78,790 before rebounding to $79,200.
- Over the past week, Bitcoin has plummeted by 20%, falling from over $100,000 to its current levels.
- The current Bitcoin price is now back to levels last seen after Donald Trump’s election victory in November 2024.
Market-Wide Losses
It’s not just Bitcoin that’s suffering losses. Other major altcoins like Ethereum, BNB, Solana, XRP, Dogecoin, and Cardano have also experienced significant drops.
- Ethereum has plunged nearly 50% from its peak in late 2024 after the election.
- Overall, the market has seen unrealized losses exceeding $1 trillion in the past month, reflecting investor concerns.
Market Liquidations
The recent volatility has led to widespread liquidations, with over $918 million in leveraged positions being wiped out, affecting more than 225,000 traders.
- Long traders betting on price increases saw $810 million liquidated.
- Short traders, anticipating further declines, also faced losses, with $108 million being erased.
Despite the current market situation, some crypto enthusiasts argue that corrections like these are typical and often precede significant price explosions.
Reasons Behind the Market Decline
Market analysts attribute the ongoing downturn to various factors, including uncertainty surrounding Donald Trump’s tariff policies, weakened investor confidence, and a substantial outflow of $3 billion from Bitcoin spot ETFs.
Fears of a trade war have significantly impacted risk assets, leading to an $800 billion decline in the crypto market since Jan. 20. During trade war periods, liquidity tends to shift towards the US dollar, viewed as a more stable asset during economic uncertainty.
“The perceived loss of stability during trade wars worries retail. As a result, we see massive daily outflows as the ‘herd’ moves together…This is why BTC can fall $5,000+ in minutes.” – The Kobeissi Letter
Investor sentiment remains weak, with the Crypto Fear & Greed Index dropping to 21, approaching “extreme fear” levels. This is the lowest reading since the 2022 bear market triggered by the collapse of various crypto firms.
