Key Highlights
- Bitcoin fell to $72,877, its lowest level since November 2024, dragging the total crypto market value down by $468B.
- Extreme fear grips markets as liquidations rise and derivatives data points to continued downside pressure.
- Bitcoin fails to act as a safe haven amid geopolitical tensions, raising fresh doubts over the ‘digital gold’ narrative.
The global cryptocurrency market has suffered a sharp sell-off over the past week, with nearly half a trillion dollars wiped out as Bitcoin led a broad market rout.
According to data from CoinGecko, total crypto market capitalization has fallen by $467.6 billion since January 29, marking one of the steepest short-term declines in recent years.
The sell-off intensified on Tuesday as Bitcoin dropped to its lowest level since November 2024, shortly after the US President Donald Trump won re-election and signaled a more crypto-friendly administration. The fall has erased much of the optimism that followed Trump’s return to the White House.
Bitcoin slides to 15-month low
Bitcoin, the world’s largest cryptocurrency, plunged as much as 7% on Tuesday in New York, touching a 15-month low of $72,877. This marked its weakest level since November 6, 2024. The decline extended an almost four-month downtrend that has weighed heavily on the market since October.
The digital asset recovered slightly during Asian trading hours on Wednesday, rising to around $76,200 at 10 AM in Singapore and about $76,600 at 6:50 AM in London. Despite the modest rebound, Bitcoin remains down 13% so far in 2026 and nearly 39% from its October 6, 2025 peak above $126,000.
Bitcoin’s fall below the $74,424.95 level also marked its lowest price of 2025, a threshold last seen on April 7 when President Trump’s initial tariff plans triggered turmoil across global financial markets.
Extreme fear grips Asian markets
Market sentiment across Asia remained fragile as traders reacted to Bitcoin’s sharp decline.
“Asia morning sentiment is cautious and defensive. The mood is still risk-off, but the pace of forced selling has slowed compared with the US close,” said Rachael Lucas, an analyst at BTC Markets.
Still, she warned that “Bitcoin printing sub-US$73,000 has pushed sentiment into extreme fear.”
The drop triggered widespread liquidations in derivatives markets, particularly among traders who had positioned for a rebound above the $80,000 level.
Liquidations and derivatives signal further weakness
The latest downturn follows a brutal liquidation event on October 10 that wiped out $19 billion in leveraged token wagers, from which the broader crypto market has yet to fully recover.
In the past day alone, more than $700 million in bullish and bearish crypto bets were liquidated in perpetual futures markets, according to CoinGlass data. Total liquidations since January have now exceeded $6.67 billion.
Signs of stress are also visible in derivatives data. Open interest in crypto futures contracts collapsed over the weekend, based on figures from CME and CoinGlass. Funding rates for perpetual futures have turned negative, indicating rising demand for bearish positions.
Put options have eased slightly, but strike-price concentrations suggest traders remain uneasy.
Broader market turbulence adds pressure
The crypto rout unfolded amid a volatile week across global markets. US equities fell, with the S&P 500 retreating from near-record highs during a technology-led sell-off. At the same time, gold and silver rebounded after suffering sharp losses late last week, while oil prices surged on renewed geopolitical risk.
Rising tensions between the United States and Iran pushed investors toward traditional safe-haven assets, leaving cryptocurrencies without support. While precious metals found buyers on February 3 and 4, Bitcoin and other digital assets continued to slide.
Digital gold narrative under scrutiny
Bitcoin’s inability to hold its ground during heightened geopolitical uncertainty has reignited debate over its status as a safe-haven asset. Often described as “digital gold,” Bitcoin has failed to mirror the behavior of precious metals during the recent risk-off period.
Investor Michael Burry warned this week that Bitcoin has been exposed as a purely speculative asset, arguing that it has not proven itself as a hedge comparable to gold or silver.
Faith in long-term holding begins to crack
Long-held beliefs around unwavering Bitcoin ownership appear to be weakening.
Historically, there has been a “tremendous amount” of near-religious belief in holding on to Bitcoin no matter what, Michael Novogratz, Chief Executive Officer of Galaxy Digital, said on an earnings call. “And somehow that virus or that fever broke, and you started seeing some selling.”
Retail participation has faded noticeably, even as some institutional holders remain invested. Major long-term Bitcoin holders have sold billions of dollars’ worth of the asset, adding to downward pressure.
ETFs and altcoins feel the impact
Bitcoin exchange-traded funds (ETFs) listed in the United States continue to see volatile flows. Despite the broader sell-off, net inflows of roughly $562 million were recorded, according to SoSoValue data, highlighting uneven investor behavior.
Altcoins have fared significantly worse. The MarketVector Digital Assets 100 Small-Cap Index, which tracks the 50 smallest tokens in a basket of 100, has plunged nearly 70% over the past year. Smaller cryptocurrencies have largely underperformed Bitcoin and Ether since the approval of US spot ETFs for the two largest digital assets attracted institutional capital.
However, spot ETFs with greater retail exposure have suffered billions of dollars in outflows since November, further weakening market depth.
Pro-crypto presidency fails to halt decline
Bitcoin had largely remained above the $75,000 level it reached following President Trump’s re-election, which initially fueled hopes of regulatory clarity and industry-friendly policies. Outside tariff-related volatility in April last year, prices had been relatively stable.
That resilience has now faded. Persistent selling since October, a brief rebound in late November, and renewed weakness in December have left investors cautious. Economic headwinds, lingering inflation concerns, and fears of an AI-driven asset bubble have added to the pressure.
As the market searches for direction, the latest rout underscores a growing reality. Despite political support and expanding institutional adoption, cryptocurrencies remain deeply tied to global risk sentiment.
For now, Bitcoin’s sharp fall has left the market questioning not just near-term price levels, but the long-standing narrative of digital assets as a safe haven in times of crisis.
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