Bitcoin has rebounded from lows near $60,000 to now around $69,000, effectively giving back gains made this week following Donald Trump’s election in November 2024.
The cryptocurrency’s decline coincided with a broader market sell-off, with the CoinDesk 20 (CD20) index losing more than 17% of its value in a week.
While Bitcoin is down about 16.5% over the past seven days, other cryptocurrencies have fared even worse. The value of Ethereum fell by 22.4%, BNB fell by 23.4%, and Solana fell by 25.2%. Despite Friday’s rebound, shares of cryptocurrency-related companies fell sharply, with Bitcoin briefly recovering to $70,000.
The day before, Bitcoin had suffered a sharp decline, with Wintermute calling it its worst single-day drop since the FTX collapse.
The sell-off was driven by market-wide liquidations and “what felt like a ‘sell at any price’ work order,” Jasper De Maere, a desk strategist and OTC trader at Wintermute, said in an emailed statement.
Demel said the agency sector reported “small but manageable liquidations” that did not fully explain the scale of the move, sparking debate about where the pressure on the system was coming from.
De Mel added that this cascading effect is accompanied by broader deleveraging across assets. Nasdaq 100 tracker QQQ is down about 500 basis points in three sessions, while silver and gold are down about 38% and 12%, respectively, from their cycle highs.
Among cryptocurrency options, he said, implied volatility jumped to 99%, with a bias towards unusually expensive puts.
Calling ether the “center of pain,” Demel said many traders have rushed to buy protection against further losses using put options, which pay out if prices fall and give the holder the right to sell at a set price. In Bitcoin, he said, positions point to expectations of continued volatility, with traders focusing on a range that could range from $55,000 to $75,000.
Cryptocurrency exchange Gemini said this week that it planned to close operations in the UK, EU and Australia and cut about 25% of its staff as part of a restructuring, further dampening market sentiment. The company will enter a withdrawal-only mode for users in affected regions and is partnering with brokerage platform eToro to help users transfer assets.
Meanwhile, shares of Bitfarms (BITF) rose after it abandoned its status as a “Bitcoin company” to focus on artificial intelligence (AI) infrastructure.
Market structures add to the turmoil. Kaiko research analyst Thomas Probst told Reuters that Bitcoin’s average 1% market depth, a measure of how much can be traded around current prices without affecting the market, has fallen to around $5 million from more than $8 million in 2025. Lower depth may make price movements more sudden.
Flows to the spot Bitcoin ETF also turned negative. Data from SoSoValue showed net outflows of about $1.25 billion over the past three days. Jim Bianco of Bianco Research estimated on social media that the average cost basis of an ETF is close to $90,000, resulting in about $15 billion in unrealized losses for holders.
“Some say cryptocurrencies are ‘programmable money.’ If that’s the case, Bitcoin should trade like software stocks,” Bianco said in an X post, adding that the recent decline suggested it was trading alongside software stocks.
Software stocks tumbled this week after Anthropic released a new automation tool for its artificial intelligence models, targeting legal and other knowledge-centric workflows. Shares of Salesforce (CRM), Adobe (ADBE) and ServiceNow (NOW) are down 8%, 9% and 13% respectively this week, just to name a few.
BTIG chief market technician Jonathan Krinsky also said Bitcoin has been correlated with software stocks recently. “There is some very compelling evidence [bitcoin and software stocks] “Tactically, we’re already at a low level,” Klinsky told CNBC.[Bitcoin] The bottom was around $60,000 last night, so I think that’s a pretty good trading level. “
“On the upside, you do need to see it move back above $73,000, which is the key breakout level that would go some way to confirming that a tradeable low has definitely arrived,” he added.
The Trump administration has maintained a pro-crypto stance, which helped Bitcoin prices hit an all-time high above $125,000 last year before the correction began.
