Bitcoin’s value has recently fallen to $63,822, continuing a downward trend observed on Monday. This drop marks a significant 6.4% decrease for the week and positions the cryptocurrency approximately 50% lower than its all-time high of $126,080 reached just five months ago. The ongoing selloff raises questions about the resilience of Bitcoin’s four-year cycle in light of adverse macroeconomic factors rather than structural issues within the cryptocurrency itself.
Analysts attribute the latest decline to several macroeconomic pressures, including heightened global tariffs and a risk-off sentiment impacting multiple asset classes. Rachael Lucas from BTC Markets highlighted that the recent plunge is not a standalone event but rather a culmination of various negative external factors impacting a market already burdened by substantial leverage built since reaching its previous peak.
The decision by the Trump administration to raise tariffs to 15% has been cited as a pivotal moment that created wide-ranging uncertainty across risk assets, including Bitcoin, which has yet to solidify its role as a safe haven. Lucas indicated that despite Bitcoin’s “digital gold” narrative, it still operates as a risk asset during periods of heightened macroeconomic fear.
Compounding these pressures is the Federal Reserve’s current stance on interest rates, with the chances of not implementing rate cuts rising significantly. This has been exacerbated by persistent inflation, which has led to negative impacts on cryptocurrencies and equities alike. Investor behavior has also shifted, with increased leverage on Bitcoin further complicating recovery efforts.
Nick Ruck, director of LVRG Research, supported the view that the decline is predominantly driven by macro factors rather than fundamental breakdowns within Bitcoin’s framework. He noted that five consecutive weeks of negative outflows from ETFs, totaling around $4 billion, along with low trading volumes, contribute to the ongoing bearish sentiment.
Market analyst Justin d’Anethan outlined how negative expectations surrounding interest rates and concerns about potential government shutdowns have also played a role in pushing prices lower. Additionally, he warned that miners might be forced to sell holdings as production costs become comparable to current reward values.
While predictions vary, the overall market outlook remains cautious. Lucas suggested that if Bitcoin’s historical cycle holds, the peak in 2025 signals a correction phase leading into 2026, potentially setting the stage for a new accumulation cycle toward 2027 and 2028. Although the immediate future appears grim, with analysts anticipating a potential drop to around $55,000, there’s a consensus that the structural foundation for Bitcoin remains intact.
According to Ruck, a stabilization at approximately mid-$60,000 is plausible, with Bitcoin likely to find support at its realized price levels before moving upward again, propelled by its scarcity narrative and institutional adoption. D’Anethan noted that dipping below $60,000 may not be as significant given the ongoing correction, potentially creating opportunities for investors to average in during this tumultuous period.
