Bitcoin prices have plunged to their lowest levels since before the 2024 elections, entering a severe bear market characterized by a staggering 37% drop from its peak in October. The digital asset briefly dipped below the $75,000 mark on Monday before recovering slightly to approximately $78,500. Analysts attribute this latest sell-off to an overall shift in market sentiment, particularly affecting speculative assets like gold and silver, which have seen significant declines recently. The downturn in precious metals prices has consequently influenced the cryptocurrency market, leading to a notable increase in liquidations.
Data from Coinglass highlights that January 30 marked the 10th largest liquidation day in Bitcoin’s history, with around $2.5 billion worth of positions liquidated. In contrast, the largest liquidation event occurred on October 10, 2025, which coincided with the initiation of the current bear market, totaling a staggering $19.1 billion. Bitcoin is known to move in parallel with other risk assets, and recent trends indicate that gold and silver, rather than serving as safe havens, have begun to mimic the behavior of momentum stocks.
The sell-off on Friday further compounded the challenges faced by Bitcoin investors, who have experienced mounting disappointments over recent months. During his 2024 campaign, Donald Trump positioned himself as a champion of cryptocurrency, promising to transform the U.S. into the “crypto capital of the world” through friendly regulations and the establishment of a strategic Bitcoin reserve. However, as market enthusiasm has faded, regulatory expectations have been largely assimilated, and more pessimistic factors have begun to influence Bitcoin’s price.
Factors such as ongoing trade tensions, a sluggish labor market, and potential government shutdowns have added to investors’ aversion to riskier assets. The recent appointment of Kevin Warsh as the head of the Federal Reserve has further exacerbated this risk-off sentiment. Although Warsh has advocated for lower interest rates since Trump’s election, he has historically preferred a hawkish approach to monetary policy, typically unfavorable for Bitcoin and similar risk assets that thrive in low-rate, easy-money environments.
Kyle Rodda, a senior financial market analyst at Capital.com, noted that the dramatic declines in gold and silver prices have prompted a broader market reaction. “Given the buildup of positioning and leverage involved, the sell-off is bleeding into other markets. Effectively, a deleveraging is happening, forcing traders to sell other assets to cover losses on their losing precious metals positions,” he explained. This cascading effect has not only contributed to the declines in stocks but also played a significant role in Bitcoin’s downturn over the weekend. Rodda highlighted that the nomination of Kevin Warsh may have acted as a catalyst, serving as the “pin” that ultimately popped the bubble.
