Bitcoin Crashes Below $80K in Worst Drop Since 2022
Cryptocurrency falls 40% from its $126K peak as $2B in leveraged positions liquidate. ETF outflows accelerate while analysts warn the rally may be over.
Bitcoin broke below $80,000 over the weekend for the first time since April 2025. It kept falling.
The world's largest cryptocurrency dropped to roughly $77,000 on Monday—a 40% decline from its 2025 peak of $126,000. More than $2 billion in leveraged positions were liquidated in 48 hours. The total crypto market shed $111 billion in value.
This is the kind of move that reshapes narratives.
The Unwind
Crypto's weekend rout coincided with the broader precious metals crash, but Bitcoin had its own catalysts.
Trump's nomination of Kevin Warsh as Fed Chair hit risk assets across the board. Warsh is an inflation hawk, which typically means tighter policy and higher real rates—the opposite of what speculative assets need to thrive.
But the technical factors were more immediate. Bitcoin had rallied aggressively since early January, when Tom Lee predicted new all-time highs by month end. That call looked prescient as BTC briefly touched $126,000. Then it looked very wrong.
Weekend liquidity is thin in crypto. When selling pressure hit, there weren't enough buyers to absorb it. Liquidations fed more liquidations. The cascade wiped out traders who had levered up during the rally.
ETF Outflows Accelerate
The institutional picture has deteriorated. Digital asset investment products recorded $1.7 billion in outflows last week—the second consecutive week of redemptions. Year-to-date flows have turned negative to the tune of $1 billion.
That's a sharp reversal from the enthusiasm that greeted spot Bitcoin ETFs in late 2024 and early 2025. Institutions that piled in are now pulling back, and the ETF structure makes it easy to exit quickly.
CoinShares called the outflows evidence of "marked deterioration in investor sentiment toward the asset class." That's analyst-speak for: smart money is selling.
Where the Bulls Went Wrong
The bullish thesis had three pillars: institutional adoption via ETFs, a pro-crypto regulatory environment under Trump, and macroeconomic conditions favoring hard assets.
Two of those pillars have cracked. ETF flows reversed. And the Warsh nomination signals that "pro-crypto" doesn't mean "easy money"—it means a Fed that might prioritize inflation fighting over growth.
The macro argument for Bitcoin as an inflation hedge never quite worked anyway. It trades like a risk asset, correlated with tech stocks and speculative growth plays. When the Nasdaq falls, Bitcoin falls harder.
What Analysts Are Saying
Paul Howard, director at market maker Wincent, offered the starkest take: "I don't think we'll see a new all-time high for Bitcoin in 2026."
Veteran trader Peter Brandt pointed to charts suggesting Bitcoin could fall as low as $66,800. Other technical analysts see potential support around $70,000, where buyers stepped in during the October 2025 correction.
On the bullish side, blockchain data shows large "mega-whales" are buying the dip. Retail may be capitulating, but the biggest holders are accumulating. Whether that signals conviction or just deep pockets trying to average down is unclear.
The 2022 Parallel
The current environment echoes late 2022, when Bitcoin fell from $65,000 to below $16,000 amid the collapse of FTX and Celsius. That was a leverage unwind too—though it took months, not days.
The difference is the starting point. Bitcoin had a 125% gain in 2024 followed by a modest pullback in 2025. Those who bought at higher levels are now underwater. Those who bought in 2023 still have cushion.
What to Watch
Key levels: $75,000 has served as short-term support. Below that, $70,000 and then $66,000 are the next technical floors.
Catalysts: This week's Fed commentary, any clarification from the Warsh nomination process, and whether ETF outflows stabilize.
The crypto thesis isn't dead, but it's being tested. A 40% drawdown is normal in Bitcoin's history—it's happened more than a dozen times. What matters now is whether this correction finds a floor or becomes something uglier.
For more on today's market moves, equities are holding up better than crypto, with the S&P 500 pushing toward record highs.