In early February 2026, Bitcoin fell below $70,000 for the first time since late last year. This erased the gains that came after the November election. During trading, the digital currency fell to a low of $68,840, which was more than 3% lower than the day before and almost 25% lower than the beginning of the year. It’s a big change from the excitement that followed Donald Trump’s reelection, when Bitcoin rose above $100,000 because people thought Washington would be friendly to cryptocurrencies. The market looks very different now. Traders are rushing to close out leveraged bets, money is leaving exchange-traded funds, and fear is the main topic of conversation. The value of all cryptocurrencies has dropped by hundreds of billions of dollars. Bitcoin’s drop has made other digital assets drop even more.
Once Bitcoin broke through some important technical levels, the selling picked up speed. It set off a wave of automated selling and stop-loss orders when it fell below its 50-day moving average for the first time since March 2022. A lot of traders were keeping an eye on $70,000 as an important level. Once it broke, CoinShares analysts began to say that Bitcoin could fall to between $60,000 and $65,000.
People were hopeful that Bitcoin would act like a digital version of gold and benefit from Trump’s return to office after the election. But in the last three months, the price has dropped 44% from its highs in October. Ethereum and XRP have dropped even more, losing more than half of their value. Things are getting worse because institutional investors are pulling back: In January alone, $3 billion left U.S. spot Bitcoin ETFs, following $7 billion in November and $2 billion in December. It looks like traditional investors are losing interest.
A lot of what’s going on can be explained by the bigger picture of the economy. People who had been hoping for lower interest rates were let down when Federal Reserve Chair Jerome Powell decided on January 28th to keep rates where they are. That made bond yields go up and made investors less willing to take risks. Kevin Warsh, Trump’s choice for the Fed, has been talking about keeping monetary policy tight. This led to four days of heavy selling, the longest period of sustained liquidation the market has seen since 2018. The stock markets have also been having a hard time, especially technology stocks in the Nasdaq.
This has affected crypto as well, since Bitcoin tends to move in the same direction as high-growth stocks. Trump’s new tariffs on Mexico, Canada, and China, which could be as high as 100%, have people worried about inflation coming back. This puts pressure on the dollar and assets that are risky, like cryptocurrency. Bitcoin miners have been selling their coins to pay for their costs because the recent “halving” event cut their rewards in half, and their plans to switch to AI-related businesses haven’t worked out. Gemini also said it was leaving some areas and laying off workers, which made things even worse.
The real damage happened when people were forced to close out their leveraged positions. As volatility rose, billions of dollars in long bets were wiped out. These forced sales affected everything from leveraged ETFs to precious metals derivatives. People who invest every day have been focusing on other things, like short-term options that focus on AI and prediction markets. This has taken some of the speculative energy away from Bitcoin. People are starting to worry again about security threats from quantum computing and whether we’ve already reached the top of the market. VanEck sent out a note with five main reasons for the drop: deleveraging, disappointment with AI projects, money leaving ETFs, the end of the rally story, and the psychological effects of Bitcoin’s four-year halving cycle. Deutsche Bank said that a general sense of pessimism is making traditional investors stay away from the space. Even though Trump has talked about making a strategic Bitcoin reserve, it hasn’t stopped the bleeding. His policies are starting to cause problems because they are contradictory, like pushing for less regulation while also causing inflationary pressure.
People have different ideas about the future, some are cautious and some see it as a chance. Kaiko analysts say that the volatility could last for a while, but history shows that these kinds of drops are often good times to buy. Bitcoin has always bounced back after major cycle bottoms in the past. Traders who are hopeful are looking ahead to the second quarter of this year, when they think prices might go back up if the Fed starts to lower interest rates. If Bitcoin falls below $65,000, some institutional investors might start buying it. Trump’s idea for a strategic reserve could help keep prices from falling too low, but tariffs and uncertainty about Fed policy are still big problems. Long-term investors in the retail market are looking for signs of capitulation, which is the last wave of panic selling that usually happens at the bottom. At the same time, big investors seem to be quietly building their positions. The current drop in Bitcoin’s price is putting all the stories people tell about it to the test. It’s not just hype anymore; the price moves based on real money flows in a market that is becoming more mature. The lessons from the crash in 2022 still hold true: portfolios are ruined by too much leverage, and the state of the economy as a whole is what really matters. As prices keep going up and down, experienced traders are watching the $60,000 level as a possible support level where the trend might change.
