Bitcoin is under pressure after a brutal week. Here's why

Bitcoin continued its downward trend on Monday, marking a significant drop as the leading cryptocurrency slipped below the $80,000 threshold for the first time since April 2025. As reported by CoinMetrics, Bitcoin was priced at $77,494.65 at 5:43 a.m. ET, experiencing a low of $74,876 before recovering slightly. Over the past week, Bitcoin has lost approximately 12%, erasing more than $200 billion in market value, according to CoinMarketCap data. The decline below $80,000 occurred over the weekend, and Dessislava Ianeva, a research analyst at crypto exchange Nexo, explained to CNBC that Bitcoin's downturn is linked to a broader risk-off sentiment in global markets. She noted that the drop was exacerbated by limited liquidity during the weekend rather than any specific issues within the cryptocurrency sector. Historically, Bitcoin has shown a correlation with risk assets like stocks. This trend was evident on Friday when U.S. equities fell, particularly in the tech sector, with companies like Microsoft suffering a 10% drop following disappointing earnings reports. This negative sentiment extended to European and Asian markets on Monday, causing commodities like gold and silver to also decline, with silver experiencing its worst day since March 1980. The sell-off was further intensified by forced liquidations, where traders' positions are automatically sold when prices hit predetermined levels. Data from Coinglass indicates that over $2 billion in Bitcoin long and short positions have been liquidated since Thursday. Such liquidations can create a domino effect in the crypto markets, leading to rapid price declines as positions are closed. Investors are closely monitoring the impending transition in leadership at the Federal Reserve, with Kevin Warsh set to replace Jerome Powell as chair. In the past week, digital asset investment products have seen outflows of $1.7 billion, marking the second consecutive week of losses, as reported by CoinShares. Year-to-date outflows have now reached $1 billion, reflecting a significant decline in investor confidence in the cryptocurrency market, according to James Butterfill, CoinShares' head of research. Yuya Hasegawa, an analyst at Bitbank, attributed the recent Bitcoin selloff to a mix of increasing geopolitical risks, the decline in tech stocks triggered by Microsoft, and a downturn in precious metals, which have been among the few safe-haven investments recently. Despite Bitcoin's reputation as a hedge during market volatility, it has fallen around 22% over the past year. Other cryptocurrencies, including ether and XRP, have also seen declines following the recent sell-offs, with Saturday witnessing liquidations across the crypto market totaling $2.56 billion, the tenth-largest single-day event recorded by Coinglass.