The market value of cryptocurrencies has collapsed by about half a trillion dollars in less than a week, driven by a selling wave led by Bitcoin, with the total market capitalization falling by roughly a trillion dollars since January 29.

Bitcoin dropped to its lowest level in around 18 months, at about $60,000. The currency is still down about 35% since the start of the year and about 55% compared to its peak of over $126,000 last October, and it is trading more than 50% below the later recorded peaks.

This drop occurred during a week of sharp fluctuations in global markets, including gold and silver, with the precious metals attracting buying interest after their declines, while cryptocurrencies did not receive similar support.

Investment flows moved toward safer traditional assets as geopolitical tensions rose and the US dollar climbed from its lowest levels in four years, increasing pressure on high-risk asset classes, foremost among them digital currencies.

In the derivatives markets, trading showed Bitcoin stumbling after a brief rebound from its lowest level in about ten months, with caution continuing in the options market. Despite a decline in bearish hedging contracts, the concentration of strike prices reflects ongoing concern, with the $60,000 level emerging as a key support area, followed by a zone near $55,000 as the next support level.

The price declines coincided with continued outflows from the 12 US exchange-traded funds (ETFs) linked to spot cryptocurrency prices, marking three consecutive months of net redemptions. About $12 billion was withdrawn during this period, approaching the longest series of outflows since these instruments were launched in 2024. Trading data also showed over $1.5 billion in liquidations of bullish speculative positions within 24 hours, accelerating the decline after breaking key technical levels and triggering automatic closures of leveraged positions.

Bitcoin (Websites)

This performance reflects the interplay of several factors, including tighter financial conditions, higher borrowing costs, changing monetary policy expectations, and a decline in global liquidity, which limited new buying flows and increased price sensitivity to selling pressure.

In contrast, gold and other precious metals rose during the same period, despite some later profit-taking, as investors turned to traditional hedging instruments in uncertain times. Measuring Bitcoin’s performance against gold shows a decline of about 60% since the late-2024 peak, reflecting its relative weakness compared to the precious metal. Trading estimates indicate that staying below the $60,000 range could lead to weaker movements, especially during low-liquidity periods, while a return of inflows and improved market liquidity could allow for relative stability.

This contrasting picture highlights a clear split between institutions that see the market repositioning for a new upward cycle and those warning of a prolonged consolidation or painful corrections, amid pressing macroeconomic and geopolitical factors, opening the door to divergent scenarios for cryptocurrencies in 2026 and beyond.