CNBC, Axios, Reuters, and Business Insider contributed to this report.
Bitcoin spent Friday doing that stomach-drop thing markets do when everyone suddenly remembers risk is a choice. The world’s biggest crypto dove early, sliding as much as about 6% at one point and flirting with the psychologically loaded $80,000 level before clawing back a bit.
By mid-morning US time, bitcoin was hovering in the low-to-mid $80Ks after touching the low $81K–$82K range, its weakest stretch since April. That puts it down roughly 10% on the week and close to a third below the early-October record above $120K–$126K, depending on the reference.
So what’s driving the slump? Same old answer, new urgency: bitcoin is trading like a high-octane risk asset again — and right now, the market wants less octane.
This isn’t a bitcoin-only drama. It’s a full-market mood swing.
Over the last six weeks, roughly $1.2 trillion has been wiped off the total crypto market cap, about a quarter of the sector’s value. Everything is selling off together — bitcoin, ether, altcoins — because investors are backing away from anything that smells like “speculative growth.”
That fear is coming from the regular markets, not just crypto land. Stocks have been wobbling hard, especially in tech. The Nasdaq has been sliding, volatility has jumped, and traders are suddenly side-eyeing AI valuations that looked invincible a month ago.
When high-flying AI names sag, bitcoin often follows. A lot of the same funds and retail traders own both trades:
“AI is the future, bitcoin is digital gold, we’re geniuses.”
When the “future” trade gets hit, they de-risk across the board.
You can see the rotation in real time: money is moving out of crypto and aggressive tech into defensive havens like gold and cash-like assets.
Markets love round numbers, and bitcoin loves them even more. But this level has real plumbing underneath it, not just superstition.
Analysts note $80,000 is close to the average cost basis for a big chunk of ETF buyers, meaning a decisive break can trigger another wave of selling — either because these holders cut losses, or because leverage tied to those levels gets forced out.
The options market is basically yelling “danger zone.” One Reuters readout says traders now put about a 50% chance bitcoin ends 2025 below $90,000, with hedging activity rising fast.
That doesn’t mean it will break $80K — but it tells you the market is increasingly preparing for that possibility.
Crypto sell-offs get nasty when leverage is involved, and leverage is definitely involved.
Recent declines have been intensified by liquidation cascades — exchanges forcing traders out of borrowed positions as prices fall. That dynamic helped fuel last month’s huge wipeout of leveraged bets, and the market still looks “scarred” from it, according to analysts tracking flows.
The Financial Times notes October’s liquidation shock (dubbed by some traders as “10/10”) reset sentiment and made investors quicker to hit the eject button on the next drop.
So when bitcoin rolled over this week, it wasn’t a slow drift down a hill. It was a slide that kept picking up speed as leveraged longs got taken out.
Because political tailwinds don’t always override macro gravity.
Yes, bitcoin surged after Trump’s inauguration and ripped to record highs in October on the back of pro-crypto policy expectations and looser regulatory vibes.
But the rally also left bitcoin priced for perfection — and perfection is the first thing investors dump in a risk-off moment. Add hawkish uncertainty about interest-rate cuts, and the speculative trades get hit hardest.
So even with a friendly White House, bitcoin can still fall if the market decides it’s time to hide under the desk.
When bitcoin drops this hard, the “crypto-adjacent” equity universe catches shrapnel.
Companies that built massive bitcoin positions on their balance sheets are sliding alongside the coin. Strategy (formerly MicroStrategy), one of the biggest corporate holders, has been falling with the downturn and faces the added wrinkle of possible index reshuffling if its market cap and liquidity keep sagging.
Miners and exchanges are also wobbling because their revenues are directly tethered to crypto prices and trading volume.
In other words: this isn’t contained to “internet money.” It’s hitting a whole ecosystem of listed companies.
Nobody knows the exact bottom. But here’s what traders are watching:
- $80K support: if bitcoin holds here, you might see a stabilization and short-covering bounce. If it cracks, the next psychological zones are lower.
- Stocks/AI sentiment: bitcoin’s correlation with speculative tech has been rising again. If AI names keep deflating, crypto probably stays under pressure.
- Rate-cut expectations: if markets come around to fewer or later cuts, risk assets broadly could stay wobbly into year-end.
Unlimited Funds CEO Bob Elliott summed it up neatly in Reuters: bitcoin is mirroring stock weakness — “but much more extreme.”
That’s crypto in a sentence.
Bitcoin’s slide isn’t about one bad headline. It’s about a market that’s suddenly allergic to risk, coupled with a crypto ecosystem that still runs on leverage and momentum. The AI trade cooling off, the Fed outlook fogging up, and a sector-wide $1.2T value wipeout have all lined up to push bitcoin back toward the level where the last big wave of ETF money came in.
If $80K holds, this could look like a brutal correction in an ongoing bull cycle. If it doesn’t, the “crypto is a safe haven” argument is going to have a very bad weekend on social media.
The latest news in your social feeds
Subscribe to our social media platforms to stay tuned