Bitcoin plunged sharply this week, sending shockwaves through the cryptocurrency market as fear and uncertainty spiked. The crypto asset dropped below its critical buy zone around $80,000 last week, trading as low as $72,889 on Tuesday.
Over $730 million in leveraged positions were liquidated in just 24 hours, as investors grappled with sustained selling pressure and heightened market uncertainty. Ethereum, Solana, XRP, and other major tokens also saw sharp losses, signaling that the crypto market remains in the grip of extreme fear.
Bitcoin which is trading at $76,445 at the time of this report, is struggling to reclaim the $80,000 level, with price action remaining fragile and rebound attempts failing to gain strong momentum. Analysts note that this indicates the market may be undergoing a broader structural correction rather than a short-term pullback.
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The current Bitcoin price marks levels last seen before President Trump’s election night victory in 2016, a period that had historically catalyzed growth in the crypto market due to his campaign support for digital assets. While Bitcoin traded sideways in the mid-$80,000 range between February and March 2025, it surged to an all-time high of $126,080 on October 6, 2025, according to The Block.
Top analyst Axel Adler describes Bitcoin’s recent trajectory as part of a bear cycle that began in October 2025. Matt Hougan, Chief Investment Officer at Bitwise, emphasizes that the flagship coin is in a multi-month bear market, driven by factors such as excess leverage and profit-taking by early investors. “This is not a bull market correction or a dip. It is a full-bore, 2022-style crypto winter set into motion by excess leverage and widespread profit-taking,” Hougan said.
The selloff has impacted the wider crypto market. Ethereum fell over 9% to below $2,200, Solana dropped more than 7% to under $100, and XRP declined 6.6% to approximately $1.52. Canton experienced the steepest losses among the top 25 tokens by market capitalization, falling over 10% to $0.17. Crypto-related equities also mirrored the downturn, with Coinbase down over 6% and the bitcoin-focused Strategy down more than 8%.
Contributing factors to the market decline include macroeconomic uncertainty amid the risk of a U.S. government shutdown and broader equity market weakness, with the Nasdaq Composite falling 2.2%. Geopolitical developments may also add to volatility, as tensions between the U.S. and Iran remain unresolved despite preparations for talks in Turkey. Analysts warn that any military escalation in the Middle East could drive oil prices higher and push cryptocurrency prices lower, given Bitcoin’s historical sensitivity to geopolitical risk.
On the positive side, some analysts view the current extreme market fear as a potential indicator for a future rebound. The Crypto Fear and Greed Index has plunged to 12, a level associated historically with market bottoms and subsequent recoveries. Previous extreme fear readings, such as the one preceding Bitcoin’s push toward $100,000, suggest that a stabilization or rally could follow the current capitulation.
Outlook
Bitcoin and the broader crypto market remain under pressure, with technical indicators signaling that volatility may persist in the near term. Investors are closely watching the $70,000 to $75,000 support zone, while macroeconomic and geopolitical developments could further influence market direction.
While short-term weakness may continue, historically, periods of extreme fear have preceded recoveries, suggesting that opportunities may exist for strategic buyers once broader market sentiment begins to normalize.