“This is absolutely crazy.”
While the comment came from a social media post, the painful knee-jerk reaction likely resonates across the board for anyone even remotely interested in cryptocurrencies, as bitcoin just fell to near $77,000 on Saturday and has stayed there ever since.
The price of the largest digital asset not only stumbled; It plummeted to the floor of $80,000, reaching levels not seen since the “tariff tantrums” of April 2025.
By Saturday afternoon, with the weekend’s liquidity tight just above $77,000, bitcoin had seen a staggering $800 billion in market value disappear from its October high above $126,000, and around $2.5 billion in leveraged long positions liquidated in 24 hours.
The demise has even pushed bitcoin out of the top 10 global assets, where it had long been, now behind institutional heavyweights like Elon Musk’s Tesla and Saudi Aramco.
To say this sell-off has been painful would be putting it mildly, as social media is in total panic and everywhere you look, there is blood on the street. And this is not just limited to bitcoin; This week has been painful across all asset classes, from tech stocks to precious metals.
If you’re wondering why the “digital gold” narrative has suddenly gone silent, here’s the collapse of the three-headed monster currently driving the market into a state of “extreme fear.”
1. Geopolitics shakes up the “security” trade
Saturday’s immediate spark was a literal explosion. Reports of a possible strong military escalation between the United States and Iran deeply chilled risk appetite. Repeating a familiar script, traders did not treat Bitcoin as a safe haven; They treated it as a source of liquidity.
In times of war, investors often undertake a “flight to safety,” shifting capital into the US dollar. Because bitcoin is a 24/7 market, it often acts as the “first responder” to global panic. Saturday served as the world’s ATM and was sold to cover losses and find security in the midst of a tight and low-liquidity weekend.
Not to mention that liquidity, since the October 10 crash (which has many pointing fingers at Binance), has never recovered, making market dynamics even more fragile heading into this weekend.
2. Gold and silver face a ‘hard money’ reset
Bitcoin was not the only victim this week. The broader “store of value” trade came under siege. Gold plunged 9% in a single trading session on Friday to just under $4,900, while silver suffered a historic 26% drop to $85.30.
In a strange twist, the traditional “safe havens” of gold and silver are selling off alongside cryptocurrencies. Analysts suggest that the massive rally in the US dollar, sparked by the appointment of Kevin Warsh to head the Federal Reserve, has made these dollar-traded metals too expensive for international buyers, leading to massive “de-risking” across all hard assets.
In early trading on Sunday, both gold and silver are rebounding from that difficult Friday, up 1% and 3%, respectively. Currently, gold is trading around $4,730 and silver around $81.
3. The ‘liquidation trap’
The geopolitical shock hit a market already “bruised” by Washington’s changing political landscape. The price drop caused a huge mechanical breakdown in the markets.
According to data from Coinglass, more than $850 million in bullish bets (long positions) were wiped out in a matter of hours on Saturday as prices began to crumble, ultimately totaling nearly $2.5 billion. These liquidations occur when traders borrow money to bet that the price will rise; Once the price reaches a certain “trapdoor”, exchanges automatically sell their holdings to pay off the debt. This creates a “domino effect”: forced sales lead to lower prices, which causes even more liquidations. Overall, nearly 200,000 traders viewed their “miscellaneous” accounts on Saturday.
4. Michael Saylor’s very bad day
To make matters worse, the price of bitcoin briefly plummeted below the Michael Saylor Strategy’s (MSTR) average entry point of approximately $76,037, putting its massive bitcoin stack “underwater.” Panic set in at the possibility of being forced to sell his stash, making the sale even more lethal.
However, CoinDesk debunked that theory, explaining that Saylor will not be forced to sell his bitcoin stash, since none of his coins are pledged as collateral. What it does mean, however, is that it will hinder your ability to raise cheap capital to buy more bitcoins on the open market.
Although Saylor later came out to say that he would “buy the dip,” the damage had already been done. The market realized that if a large corporation, like Strategy, cannot raise more capital to buy bitcoin on the open market, the already fragile market will be left without buyers, becoming vulnerable to forced liquidations and profit taking.
Consequently, sentiment has shifted from “skyrocketing” optimism to defensive hedging, as investors rush to buy price insurance in the options market against further declines towards $75,000.
5. Wall Street on the edge: US futures turn red
The contagion is already seeping into traditional finance.
While the New York Stock Exchange is closed for the weekend, US stock futures, which opened trading Sunday night (US East Coast Time), are lower across the board; the Nasdaq is down 1% and the S&P 500 is down 0.6%.
Get ready for a possible messy Monday!
6. Whales against the world: the story of two investors
Perhaps the most telling part of this drop is not the price; It is the wallet data.
According to Glassnode data, small investors are fleeing. The “small fish” (holders with less than 10 BTC) have been persistently selling bitcoins for over a month. They are capitulating, scared by a 35% drop from the all-time high of $126,000.
Meanwhile, “mega whales” (those holding more than 1,000 BTC) have been quietly adding to their stacks. This cohort has now returned to levels not seen since late 2024, effectively absorbing the coins that panicked retail traders are dumping. Although their purchases were not significant enough to drive up the price.
7. Bigger Picture: Inevitable Human Greed
Now let’s zoom out and compare this weekend’s sell-off and current market dynamics to those that occurred before.
To be clear, this cycle is not all doom and gloom. Companies like BlackRock and JPMorgan from traditional finance have bet on cryptocurrencies through exchange-traded funds and stablecoins. Regulatory frameworks are being created around the world to make cryptocurrencies more accessible and usable to the masses, and many legitimate crypto companies are going public and becoming part of many fund managers’ “must-have” stock allocations. None of these were even remotely imaginable during the previous cycles.
But the parallels between the last four months and the onset of crypto winter in late 2021/early 2022 may be growing, and while the names and methods may have changed, human behavior and the boom-and-bust nature of the markets have not.
Companies like Three Arrows Capital, Do Kwon and TerraUSD, BlockFi and Sam Bankman-Fried could have been replaced by the Trump family’s alleged naked speculation, Michael Saylor’s massive buying and promises of an 11% risk-free rate in a world of 3% risk-free rates, and widely followed Twitter crypto personalities teaming up with investment bankers to make a quick buck in digital asset treasury companies..
As in 2021, these new dynamics have likely created a speculative bubble that will likely have collapsed in 2026. The only question now is how long it will last and how deep the slowdown will be.
While no one has fond memories of crypto winter 2022, with the price of bitcoin falling 80%, the timeline was relatively short, about a year from start to finish. From there, the price of bitcoin quickly doubled, rising through 2023, and finally reaching a new record high in early 2024.
In theory, if there were another 80% drop from the October 2025 high of $126,000, bitcoin would be around $25,000. It’s a scary number to even think about, but it may be necessary to erase the worst of this past bull market and clear the way for another sustained rally.
The outcome of the 2022 bear market came shortly after the collapse of FTX and the arrest of its CEO, Sam Bankman-Fried. It remains to be seen if the bracelets will be necessary for any of this cycle’s bull market personalities.
“Only when the tide goes out do you find out who has been swimming naked,” said Warren Buffett. The tide may not be completely out yet, but it sure seems like it’s heading in that direction.
Read more: How instant gratification is taking the wind out of the bitcoin market
