Bitcoin has recovered from a low near $60,000 to now stand at around $69,000, having given back the gains it made following Donald Trump’s November 2024 election this week.
The cryptocurrency’s decline was accompanied by a broader market selloff that saw the CoinDesk 20 (CD20) index lose more than 17% of its value in a week.
While bitcoin fell around 16.5% in the last 7-day period, other cryptocurrencies fared worse. Ether lost 22.4% of its value, BNB fell 23.4% and solana 25.2%. Shares of crypto-related companies registered significant declines despite a Friday rebound as the price of BTC briefly retook $70,000.
The move followed a sharp drop a day earlier, which Wintermute described as the worst single-day drawdown in bitcoin since the FTX collapse.
The selling was driven by market-wide liquidations and what “felt like a ‘sell at all costs’ order of business,” Jasper De Maere, desk strategist and OTC trader at Wintermute, said in an emailed statement.
De Maere said institutional desks reported “small but manageable liquidation”, which did not fully explain the size of the move, prompting debate about where the stress was in the system.
De Maere added that the cascade came alongside a broader deleveraging across assets. The Nasdaq 100 tracker QQQ fell about 500 basis points over three sessions, while silver and gold fell about 38% and 12%, respectively, below their cycle highs.
In crypto options, implied volatility jumped into the 99th percentile, skewed toward unusually expensive puts, he said.
Marking ether as the “epicenter of the pain”, de Maere said many traders rushed to buy protection against further losses using put options, which pay off if prices fall and give the holder the right to sell at a set price. In bitcoin, he said positioning pointed to expectations of continued turbulence, with traders focusing on a wide range that could run from around $55,000 to $75,000.
Further hitting sentiment, this week crypto exchange Gemini said it plans to close operations in the UK, EU and Australia, cutting around 25% of staff as part of a restructuring. The firm will enter withdrawal mode for users in the affected regions and work with brokerage platform eToro to allow users to transfer their assets.
Meanwhile, Bitfarms (BITF) saw its shares rise after ditching its “bitcoin company” identity to instead focus on artificial intelligence (AI) infrastructure.
The market structure has increased the turbulence. Bitcoin’s average market depth of 1%, a measure of how much can be traded near the current price without moving the market, has fallen to about $5 million from more than $8 million in 2025, Kaiko analyst Thomas Probst told Reuters. Shallow depth can make price movements steeper.
Flows in spot bitcoin ETFs have also turned negative. Data from SoSoValue shows about $1.25 billion of net outflows over the past three days. Jim Bianco of Bianco Research estimated on social media that the average ETF cost basis is close to $90,000, leaving holders with about $15 billion in unrealized losses.
“It has been said that crypto is ‘programmable money.’ If that’s the case, BTC should trade like a software stock,” Bianco said in an X post, adding that the recent drop shows it trades in tandem with software stocks.
Software stocks fell this week after Anthropic released a new automation tool for its AI models aimed at legal and other knowledge-focused workflows. Shares of Salesforce ( CRM ), Adobe ( ADBE ), and ServiceNow ( NU ) lost 8%, 9%, and 13%, respectively, for the week, to name a few.
BTIG chief market technician Jonathan Krinsky also said that bitcoin has been correlated with software stocks recently. “There is some pretty compelling evidence both ways [bitcoin and software stocks] have put in tactical lows,” Krinsky said during an interview with CNBC.”[Bitcoin] bottom last night right around $60,000 so I think that’s a pretty good level to trade against.”
“On the positive side, you really need to see it back above $73,000, that was the key breakdown level which kind of confirms that a tradable low is definitely in,” he added.
The Trump administration has maintained a pro-crypto stance, which helped the price of bitcoin hit a new record high above $125,000 last year before a correction set in.
