Bitcoin on Tuesday wiped out all of the gains it had made since President Donald Trump’s election victory in early November 2024. Selling pressure continued into Wednesday, briefly dragging the world’s largest cryptocurrency below the $72,000 level.
The digital asset has now plunged roughly 42% from its record high above $126,000 reached last October, firmly placing it in bear-market territory.
Bitcoin surged through 2025 on expectations of a more crypto-friendly regulatory environment under the Trump administration, strong inflows into spot exchange-traded funds, and growing institutional adoption. Since peaking, however, prices have fallen sharply, with losses accelerating in 2026.
Citi Research analyst Alex Saunders said downside sensitivity to equity markets, heightened geopolitical risks, and long-position liquidations have weighed heavily on bitcoin and the broader crypto market.
Saunders also noted a clear slowdown in inflows to U.S. spot bitcoin ETFs since Oct. 10 last year, which he views as a key source of incremental demand. The drop in new money has coincided with increased caution among long-term holders, who have grown more concerned about cyclical weakness in bitcoin.
Nearing critical levels
Bitcoin slid as much as 5% on Wednesday to an intraday low of $71,913.4, marking its weakest level since early November 2024.
Citi Research analyst Alex Saunders said bitcoin is now nearing critical price thresholds. He noted that prices have fallen below Citi’s estimated average U.S. spot ETF entry level of $81,600 and are approaching the roughly $70,000 level that prevailed ahead of the U.S. presidential election.
Saunders pointed to U.S. legislation passed by the House in July 2025—currently stalled in the Senate—as a potential catalyst for renewed investor interest. He said there has been some progress early this year, with the Senate Finance Committee releasing a draft bill intended to be reconciled with the House-approved CLARITY Act, although the proposal has yet to gain broad support and a committee vote has been delayed. The Senate Agriculture Committee has also advanced its own version of the legislation.
According to Saunders, positive developments on the regulatory front could provide a meaningful boost to market sentiment and capital inflows, citing past examples such as stronger ETF demand following the U.S. election and the passage of the GENIUS Act in July 2025.
No signs of structural stress in crypto markets
Analysts say bitcoin’s latest selloff does not signal deeper structural problems, but rather reflects the normal ebb and flow of bull and bear cycles.
“Recent price movements in bitcoin don’t suggest that anything has broken in the crypto market—they simply mirror the current stage of the broader macroeconomic cycle,” said Gil Rosen, co-founder of the Blockchain Builders fund, in comments to Investing.com. He noted that earlier gains had overshot reality, with markets pricing in an unrealistically smooth rally. The subsequent decline, Rosen added, was not driven by crypto-specific factors, but by external pressures including geopolitics, tariffs, and policy uncertainty. As institutional investors now play a larger role, bitcoin increasingly trades like a risk asset, making it more vulnerable when macro conditions deteriorate.
Nicholas Motz, CIO of Soil.co and CEO of ORQO.digital, echoed this view, arguing that the sharp unwinding of precious metals positions late last week triggered a broader risk-off move across asset classes.
“When investors face pressure in traditional safe havens, they often sell their most liquid and profitable holdings—such as bitcoin—to offset losses elsewhere,” Motz said. He characterized the recent decline as a forced deleveraging episode rather than a fundamental change in long-term crypto adoption.
Sources: Anuron Mitra
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