Emma Chen
Bitcoin Recovers From $60,000 Scare, Yet Downside Risks Persist
Bitcoin recovered from its previous low on Friday, narrowly escaping a drop below the critical $60,000 level, but some market analysts predicted further selling ahead. Late Thursday, the world's largest cryptocurrency dipped below $61,000, hovering barely above the $60,000 threshold. As of 4:54 a.m. ET on Friday, Bitcoin was trading at $66,015. Bitcoin's price fell to $63,000 on Thursday, its lowest level in more than a year and half of its all-time high of $126,000, set in October 2025. The world's most renowned cryptocurrency has now lost half of its value since its October peak, plunging below $63,000 on Thursday for the first time in 16 months.
The bitcoin bear market started after the cryptocurrency hit an all-time high of almost $126,000 in October. There are a lot of reasons behind this. Bitcoin went up when Donald Trump became president in 2024 and stayed high until 2025. Coinbase said that the biggest cryptocurrency went above $100,000 for the first time in December 2024 and hit a record high of $126,210.50 on October 6. But the value of bitcoin has dropped in the last several months, especially in January and early February.
Why This News Matters
You might feel better about Bitcoin's rise, but the big picture is still scary. Losing half of its value since October, it is now worth about $60,000. People who trade cryptocurrencies aren't as sure about this anymore. This change is important because bitcoin is no longer just a little bit of money. It is now very much like tech stocks, institutional portfolios, and ETFs. The sell-off is making markets around the world less risky, and it's also making people doubt the long-held belief that bitcoin is a safe place to put your money when things go wrong.
Market Volatility Weighs on Bitcoin and Crypto Stocks
The sell-off is happening at the same time that US technology stocks have been going down for a long time. Bitcoin is often linked to risky assets like US tech stocks, and when they go down, Bitcoin does too. The market has been unstable because gold and silver prices have been very volatile. The prices of cryptocurrencies have been going down for months, which has hurt the stocks of companies that have been buying more and more bitcoin. People are even more worried about the stock market as a whole now. The crypto market keeps going down because of forced liquidations. This happens when traders have to sell their positions right away when bitcoin hits a certain price. Coinglass says that on Thursday, more than $2 billion worth of long and short cryptocurrency bets were closed. That amount had grown to about $800 million by Friday.
Institutional Investors Pull Back from Crypto
Meanwhile, huge institutional investors appear to be selling their stakes. According to CryptoQuant, US exchange-traded funds will be net sellers in 2026, having purchased 46,000 bitcoins at this time last year. "Institutional investors are really unwinding their cryptocurrency holdings," says Markus Thielen, head of research at 10X Research, on CNBC's "Access Middle East." Thielen stated that the average price paid for bitcoin through an ETF is $90,000, and that these investors are "materially in losses now." "These large outflows [are] during U.S. trading hours with those investors throwing in the towel," according to him.
Bitcoin ETFs have also not taken off as expected by crypto bulls, and institutional investment in bitcoin has fallen in recent months, resulting in lower transaction volumes. Bitcoin is already down more than 40% from its all-time high. Ether and XRP are trading at more than 60% below their all-time highs. Solana is wrong by more than 70%. Ether, the second-largest cryptocurrency, has experienced losses of more than 30% this year alone.
Analysts Warn of Further Bitcoin Losses
According to market observers, bitcoin's slide below $70,000 may herald further loss. Meanwhile, 10X Research believes bitcoin might fall as low as $50,000. "I think we are going to have a little counter-trend rally that might go sideways or bounce a little bit," according to Thielen. "But I think during the summer we make another low."
According to CoinGecko data, the global cryptocurrency market has lost $2 trillion in value since early October. Companies who have invested heavily in bitcoin have suffered greatly as a result of the recent sell-off. Multiple cryptocurrency firms funded by the Trump family and listed on the stock exchange saw their valuations fall in response to bitcoin's downturn. Treasury Secretary Scott Bessent told the House Financial Services Committee that the Treasury has no power to stabilize cryptocurrency markets.
Bitcoin Fails to Act as ‘Digital Gold’
Crypto bulls have long argued that investors should approach bitcoin as "digital gold." Geopolitics has heated up this year. The CNN Fear and Greed Index and VIX are both flashing danger warnings. That concern has fueled a historic increase in gold prices, which recently exceeded $5,500 per troy ounce. However, bitcoin is not gaining traction. Despite the uncertainties, it has declined by 20% this year. Michael Burry recently posted on Substack that he believes gold and silver's extraordinary volatility is the result of bitcoin bulls liquidating their metal bets. The ongoing difference between gold (up 24% since October) and bitcoin (down 50%) has only strengthened this opinion.
What to Watch Next
The next test is whether bitcoin can stay above important psychological levels or if another wave of selling will push it down to analysts' downside targets near $50,000. Keep a close eye on ETF flows; if more institutions leave, it will mean more pain ahead. At the same time, lawmakers and regulators are cracking down on crypto-related activity, which could make people feel even worse. Investors will have a harder question to answer in the long run: if gold keeps going up while bitcoin goes down, does crypto still deserve the name "digital gold," or is this just another brutal but familiar part of its boom-and-bust cycle?
