Bitcoin has recovered from a low near $60,000 to now sit around $69,000, having effectively given back the gains it made following the election of Donald Trump in November 2024 this week.
The cryptocurrency’s decline was accompanied by a broader market sell-off that saw the CoinDesk 20 Index (CD20) 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 cryptocurrency-linked companies saw significant declines despite Friday’s rally, as the BTC price briefly regained $70,000.
The move followed a violent drop a day earlier that Wintermute described as bitcoin’s worst single-day drop since the FTX collapse.
The selloff was driven by market-wide selloffs and what “looked like a ‘sell at any price’ run order,” Jasper De Maere, Wintermute desktop strategist and OTC trader, said in an emailed statement.
De Maere said institutional offices reported a “small but manageable liquidation,” which did not fully explain the magnitude of the move, fueling debate about where the strain was in the system.
De Maere added that the cascade was accompanied by broader cross-asset deleveraging. The Nasdaq 100 QQQ index fell about 500 basis points in three sessions, while silver and gold fell about 38% and 12% below their cycle highs, respectively.
In crypto options, implied volatility jumped to the 99th percentile, with a bias toward unusually expensive puts, he said.
De Maere singled out ether as the “epicenter of the pain,” saying many traders rushed to buy protection against further losses using put options, which can pay out if prices fall and give the holder the right to sell at a fixed price. In bitcoin, he said positioning pointed to expectations of continued turbulence, with traders focused on a wide range that could be between about $55,000 and $75,000.
Hitting sentiment further, this week cryptocurrency exchange Gemini said it plans to close operations in the United Kingdom, the European Union and Australia, and cut around 25% of staff as part of a restructuring. The company will enter withdrawal-only mode for users in affected regions and will partner with brokerage platform eToro for users to transfer their assets.
Meanwhile, Bitfarms (BITF) saw its shares rise after abandoning its “bitcoin company” identity to focus on artificial intelligence (AI) infrastructure.
The market structure has added to the turbulence. Bitcoin’s 1% average market depth, a measure of how much it can trade near the current price without moving the market, has fallen to around $5 million from more than $8 million in 2025, Kaiko research analyst Thomas Probst told Reuters. Less depth can make price movements more abrupt.
Flows into spot bitcoin ETFs have also turned negative. SoSoValue data shows around $1.25 billion in net outflows over the past three days. Jim Bianco of Bianco Research estimated on social media that the average cost of ETFs is close to $90,000, leaving holders with about $15 billion in unrealized losses.
“It has been said that cryptocurrencies are ‘programmable money.’ If so, BTC should trade like a software stock,” Bianco said in an X post, adding that the recent drop shows it is trading alongside software stocks.
Software stocks fell this week after Anthropic launched a new automation tool for its artificial intelligence models aimed at legal and other knowledge-focused workflows. Shares of Salesforce (CRM), Adobe (ADBE), and ServiceNow (NOW) lost 8%, 9%, and 13% respectively during the week, to name a few.
BTIG Chief Market Technician Jonathan Krinsky also said bitcoin has become correlated with software stocks lately. “There is quite convincing evidence that both [bitcoin and software stocks] We have set tactical minimums,” Krinsky said during an interview with CNBC. “[Bitcoin] It bottomed out around $60,000 last night, so I think that’s a pretty good level to trade.”
“On the upside, you really need to see it back above $73,000, that was the key breakout level, which would sort of confirm that there is indeed a tradable bottom,” he added.
The Trump administration has maintained a pro-cryptocurrency stance, helping the price of bitcoin reach a new all-time high above $125,000 last year before a correction occurred.
