Bitcoin dropped below $80,000 for the first time since April 2025, erasing all gains recorded since Donald Trump’s November 2024 election, according to a report from Wintermute. Over the weekend, the crypto market was hit by $2.7 billion in liquidations as macro catalysts collided with tightly compressed leverage.
Traders pointed to mixed Mag7 earnings, a sudden decline in precious metals, and Warsh’s Fed nomination as factors behind the move. Crypto also lagged other markets during the stretch, while showing negative skewness in both rallies and selloffs, a pattern often seen in bear-market conditions.
A 50% four-month drawdown from the October peak
Bitcoin had climbed to an all-time high of $126,000 in October, then fell into the lower $60,000 range before rebounding to the lower $70,000 area by the weekend. Even with that bounce, the asset has still posted a 50% decline over four months, its largest pullback since 2022.
Spot trading activity picked up as well. IBIT reached $10 billion in notional trading volume by Thursday, showing how central ETFs have become to Bitcoin price formation rather than simply reflecting moves made elsewhere.
ETF redemptions added direct pressure to the spot market
Spot flow data showed persistent selling, especially from U.S. participants. Coinbase premiums remained in discount throughout the move, a sign of continued domestic selling pressure. Internal OTC data told a similar story, with institutions reducing Bitcoin exposure through the week.
Since November, the spot Bitcoin ETF complex has recorded roughly $6.2 billion in net outflows, the longest such streak since the products launched. That matters because redemptions force sponsors to sell spot Bitcoin into a falling market, creating a feedback loop that can intensify the decline.
IBIT stood out as both the largest holder and a meaningful source of incremental supply during the washout. At the same time, IBIT and Deribit now account for about half of the crypto options market.
Capital rotation into AI trades left Bitcoin under pressure
Analysts also said Bitcoin has been tracking software names in the S&P, largely because capital has been pulled toward AI themes. That rotation left both crypto and non-AI software stocks under strain.
Weak earnings from Microsoft were seen as a possible sign that the trade may be shifting, though the report said a larger de-risking move would still be needed before a clearer reversal takes shape.