Bitcoin price briefly fell to a 16-month low at $60,000 today before modest dip buying helped stabilise prices and sparked a modest recovery.
While the buy the dip crowd managed to prevent a further slide into the high 50s, the sentiment across the broader crypto space remains incredibly fragile.
The crypto fear and greed index fell to its lowest level in a year at 5, reflecting a market steeped in extreme fear and peak uncertainty.
This wave of panic selling hit hard across the board, as the total crypto market cap dropped over 2.5% to $2.3 trillion within a single session.
Across the altcoin market, select outliers managed to lock in double-digit gains on the back of project-specific network upgrades and speculative trading, but most of the top altcoins were still in the red by the Asian close.
Investors are now looking toward the upcoming weekly close to see if this support level will hold or if a deeper correction is on the horizon.
Why is Bitcoin falling this week?
Bitcoin’s downturn this week, which saw the flagship crypto drop over 20%, is largely a risk-off contagion fueled by a growing scepticism over the AI revolution.
Tech giants like Alphabet and Amazon recently spooked investors by announcing massive increases in capital expenditure, projected to hit nearly $700 billion across the sector in 2026, without showing immediate revenue gains to match.
This AI spending fatigue has triggered a massive rotation out of high-growth assets, as the market begins to treat the once-bulletproof tech sector as an overextended bubble, dragging Bitcoin down in its wake.
Compounding this tech rout is a darkening macroeconomic landscape in the US, where monetary expectations have taken a hawkish turn.
The recent nomination of Kevin Warsh to lead the Federal Reserve has introduced hard money fears, with analysts predicting a more aggressive reduction of the Fed’s balance sheet and a higher-for-longer approach to interest rates.
With the Fed holding rates steady at 3.50–3.75% in January and inflation remaining sticky at 3.4%, the hope for liquidity-driven rallies has evaporated, leaving speculative assets like crypto without their primary fuel.
Beyond the Fed, a confluence of bearish catalysts has hammered sentiment this week.
Geopolitical tensions in the Middle East have seen investors flee to traditional safe havens like the US Dollar and Gold, which hit record highs as Bitcoin failed its “digital gold” test.
Additionally, massive outflows from US spot Bitcoin ETFs, totalling over $3 billion in recent weeks, have created a mechanical selling pressure that intensified into a liquidation cascade.
Just at the time of writing, over $2.34 billion worth of leveraged crypto positions had been liquidated, with long traders bearing the brunt of the damage as they were forcibly exited from their positions, fueling one of Bitcoin’s largest intraday drops in recent years.
Will Bitcoin rise again?
As Bitcoin hovers close to the critical $60,000 handle, the market is entering a make-or-break technical phase.
The brief touch of $60,008 on Friday morning served as a massive liquidity grab. Analysts at Nifty Trader and TradingView emphasise that as long as Bitcoin stays above $60,000 on a daily closing basis, a relief rally toward $70,040 could ensue.
However, exchange order books show that while there are significant buy walls clustered around $60,000, they are being tested by aggressive spot selling from ETF outflows.
If the $60,000 level fails to hold through the weekend, the technical escape hatch resides significantly lower around the $56,000 – $58,000 area, which is the 200-week Moving Average, a dynamic support level that has historically signalled the end of major corrections in previous bull cycles.
Analysts at Galaxy Digital point to this as the next significant structural support, adding that the current 50% drawdown from the October 2025 peak of $126,000 often precedes a dip into the mid-$50,000s before a true trend reversal occurs.
However, Bitcoin’s drop to $60,000 has cleared a massive liquidity cluster, which some traders interpret as a potential local bottom, according to crypto analyst Gerla.
Bitcoin 24-hour liquidation heatmap. Source: Gerla on X.
This could help explain the rebound later in Asian trading hours, with Bitcoin recovering above $68,140 at press time.
If the current momentum continues and bulls manage to reclaim $70,000, it could help restore confidence.
However, according to well-followed market analyst Rekt Capital, Bitcoin has entered a bear market after pointing out that Bitcoin’s 21-week and 50-week Exponential Moving Averages (EMAs) have undergone a bearish crossover.
He noted that this is the fourth consecutive cycle where such a crossover has preceded “macro downside continuation.”
In a subsequent post, he noted that Bitcoin’s recent breakdown from a macro triangle aligns with past post-halving cycles, which have consistently led to deeper corrections.
BTC/USD 1-month price chart. Source: Rekt Capital on X.
“This is the 4th consecutive cycle that this historical tendency has continued. And history suggests there’s more downside to come,” the analyst said.
Top altcoins this week
The total market cap of all altcoins combined fell 35% over the past 7 days as it lost nearly $450 billion in capitalization and stabilized around $814 billion at the time of writing.
Ethereum (ETH) fell over 30% over this week as it fell from $2,700 to under $1,800 before backpedaling some of its losses and settling near $2,000 when writing.
XRP (XRP) fell under the $1.5 support and was down 17% in the period, while BNB (BNB) and Solana (SOL) posted losses of 24% and 28%, respectively.
Some of the top losers this week were Monero (XMR), Story (IP), and Optimism (OP), which dropped by 30%, 29%, and 28%, respectively.
Late in the week, Decred (DCR) saw gains of 31%, attributed to a technical breakout and capital rotating from other privacy coins into the token as investor demand rose.
MYX Finance (MYX) also saw gains of nearly 17%, driven by increased speculative trading and investor interest following the protocol’s V2 upgrade, which introduced portfolio margining and enhanced capital efficiency.
As for Hyperliquid (HYPE), its 15% gains were supported by its listing on the crypto exchange Coinbase and its expansion into the prediction market through its HIP-4 protocol.
Source: CoinMarketCap
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