Bitcoin’s Rough Week: What’s Driving the Latest Sell-Off

The Bitcoin sell-off pushed prices below $80,000 for the first time since April 2025. Traders liquidated over $2 billion in positions.

Global markets and crypto react to equities and metals

The crypto market declined after global equities fell and gold and silver prices dropped.

According to CoinMetrics, Bitcoin was trading at $77,925.99 at 08:37 a.m. ET on Monday, up roughly 1%. The cryptocurrency dipped as low as $74,876 before recovering some of its losses. Over the past week, Bitcoin has dropped about 12% in the last seven days, erasing more than $200 billion in value, CoinMarketCap data shows.

Dessislava Ianeva, research analyst at crypto exchange Nexo, told CNBC that bitcoin’s drawdown coincided with a broader risk-off shift across global markets.

She added that it was amplified by structurally thin weekend liquidity, rather than by crypto-specific developments or signs of fundamental stress.

Investor sentiment weakens

Bitcoin often correlates with risk assets like stocks and may go up and down with them. On Friday, U.S. stocks fell, with tech stocks like Microsoft leading the way. Microsoft’s stock fell 10% after its earnings report disappointed investors.

On Monday, that negativity spread to the European and Asian stock markets. Also, gold and silver extended losses.

Forced liquidations worsened Bitcoin’s plunge. These occur when traders’ positions are automatically sold once the price reaches a set level.

The potential impact of Federal Reserve leadership

Last week, digital asset investment products had outflows of $1.7 billion for the second consecutive week. Year-to-date outflows have reached $1 billion, “signalling a marked deterioration in investor sentiment towards the asset class,” James Butterfill, head of research at CoinShares, said on Monday.

Analyst Yuya Hasegawa at Japanese crypto firm Bitbank told CNBC that the recent Bitcoin sell-off appears to result from rising geopolitical risks, a decline in tech equities triggered by Microsoft, and a breakdown in precious metals. He noted that metals were one of the few remaining safe-haven outlets for investor capital in recent weeks.

Bitcoin is sometimes seen as a safe-haven asset during market volatility. However, it has fallen about 22% over the past year.

Other cryptocurrencies also declined on Monday following a sell-off in the last few days, including ether and XRP.

Bitcoin sell-off may continue amid market risks

Last month, crypto market participants told CNBC they expect bitcoin’s volatility to continue this year. Price forecasts range from $75,000 to more than $200,000.

Bitbank’s Hasegawa said that bitcoin may be nearing a “short-term bottom” around $70,000, which could be a “key reference point.”

He added “A sustained move materially below that level would likely require a meaningful reset in market conditions.”

Still, some think bitcoin could fall significantly further. John Blank, chief equity strategist at Zacks, said bitcoin could fall to $40,000 this year.

“We can get there very quickly, or more likely, we are going to get there over the next six to eight months,” Blank told CNBC’s “Squawk Box Europe” on Monday.Blank said he arrived at that figure by examining the lows and highs of past market cycles.

Bitcoin has previously dropped 70% to 80% from its all-time highs during past “crypto winters.” Its record peak is $126,000, which it reached in October. $40,000 would mark a roughly 70% fall from that level.

Geopolitical and economic drivers

Experts attributed the decline in crypto prices to looming geopolitical and economic uncertainty, which prompted a momentum-driven selloff as crypto holders raced to the exits. The initial drop likely forced some leveraged buyers to sell off their positions, intensifying downward pressure.

Bryan Armour, director of passive strategies research at financial firm Morningstar, explained that crypto tends to fall when investors reduce risk.

“That may have precipitated the decline, and then it was like a snowball rolling downhill,” Armour added.

The U.S. labour market has slowed in recent months, even as inflation remains above the Federal Reserve’s 2% target.

Meanwhile, geopolitical tensions continue to rattle global markets. The ongoing war between Russia and Ukraine remains a major source of risk and escalating U.S. threats against Iran have driven oil prices higher.

“Everything that’s been happening the last few weeks is definitely adding a lot of nervousness in the market,” Christian Catalini, founder of the MIT Cryptoeconomics Lab, told ABC News. “Anything that makes investors risk averse of course affects the price of bitcoin.”

Longer-term trends

The recent drop in the price of bitcoin extends a prolonged sell-off. Bitcoin is about 40% below its  October 2025 peak. During the same period, the S&P 500 gained 5% while gold increased 17%.

Bitcoin has declined for four consecutive months, a feat not seen since the pandemic.

Some analysts weren’t surprised by bitcoin’s recent drop, given how high the price had climbed.

Bitcoin’s price increased more than 40% in late-2024 following President Donald Trump’s election, after he expressed support for cryptocurrency. The price then fell over the ensuing months but surged again in October 2025.

“There’s a natural limit to how high it can go up,” Steve Sosnick, chief strategist at Interactive Brokers, told ABC News.

Bitcoin has been highly volatile since it was launched around 15 years ago.

Despite fluctuations, bitcoin has shown long-term growth, rising 96% over the past five years, outpacing the S&P 500’s 80% gain.

Armour said the volatility of crypto makes its future price nearly impossible to predict, and the only certainty may be more volatility.

Bitcoin ETFs bring crypto closer to mainstream finance

The introduction of bitcoin ETFs (exchange-traded funds) has brought crypto closer to traditional finance over the past two years, allowing investors to gain exposure without holding the underlying asset.

Despite a broader investor base, digital assets continue to fluctuate.

“The best thing investors can do if they do want to get involved in bitcoin is to know their limitations,” Armour said. “They shouldn’t have high confidence in any one outcome.”

DISCLAIMER: This information is not considered as investment advice or an investment recommendation, but is instead a marketing communication.