Bitcoin Drops Below $61,000 as Doubts Grow and Market Goes Crazy

The Sharp Drop and Market Madness

This was a quick reminder of how quickly things can change in this market. Around 7:37 p.m. Eastern Time, it was still down about 15% and trading at $62,448.

This isn't just a little thing; it's a sign that traders and experts are worried about something bigger.

Geopolitical Tensions and Bitcoin's Failure as a Hedge

Think about the problems that are still going on in parts of Europe, the Middle East, and Venezuela. These are geopolitical problems that should, in theory, make people want a decentralized currency more.

But Bitcoin hasn't kept its promise; it's gone down, which makes people question how useful it really is.

This drop didn't happen all at once. Bitcoin hit its highest point of just over $126,000 in early October, which seems like a long time ago now.

It has been going down steadily since then, and each week it loses speed. Many people thought that $70,000 was a key support level, but that Thursday morning it broke through it.

Once that fell apart, people started selling more quickly, and prices went back to where they were before the last big election cycle. Bitcoin has dropped about 30% in value in just one week.

Expert Opinions and Comparison to Gold

This is a terrible correction that has hurt a lot of portfolios.

Experts are giving their opinions, and things are getting worse and worse. Marion Laboure from Deutsche Bank wrote to clients and said it clearly: this continued liquidation shows that traditional investors are pulling back, and the overall mood toward crypto is getting worse.

It's not hard to see why. There have been big promises made about Bitcoin, like that it would be widely used as a way to pay for things and keep people safe from economic problems, but those things haven't happened.

Adoption for everyday purchases? It isn't very popular yet. Bitcoin has been more closely linked to tech companies than gold during recent market changes, which goes against the idea that it is a "store of value."

The comparison is interesting when it comes to gold. The price of Bitcoin has dropped by about 40% in the last year, while the price of gold futures has gone up by 61%. That's a big failure, especially for something that should be able to compete with gold.

Broader Crypto Pain and Technical Levels

This is a terrible correction that has hurt a lot of portfolios.

Experts are giving their opinions, and things are getting worse and worse. Marion Laboure from Deutsche Bank wrote to clients and said it clearly: this continued liquidation shows that traditional investors are pulling back, and the overall mood toward crypto is getting worse.

It's not hard to see why. There have been big promises made about Bitcoin, like that it would be widely used as a way to pay for things and keep people safe from economic problems, but those things haven't happened.

Adoption for everyday purchases? It isn't very popular yet. Bitcoin has been more closely linked to tech companies than gold during recent market changes, which goes against the idea that it is a "store of value."

The comparison is interesting when it comes to gold. The price of Bitcoin has dropped by about 40% in the last year, while the price of gold futures has gone up by 61%. That's a big failure, especially for something that should be able to compete with gold.

Causes, Liquidations, and Future Outlook

This crypto is going down because the U.S. tech stocks are doing badly. The State Street Technology Select Sector SPDR ETF, for example, fell 1.8% that Thursday. It had lost three days in a row. It's not surprising that cryptocurrencies tend to do well when the IT sector does well. This is because they are connected to new ideas, speculation, and a desire to take risks.

In this case, precious metals are still doing better than digital assets, even though silver is going down and gold is having trouble. One thing that is making the sell-off worse is forced liquidations. When prices reach certain levels, these happen, and leveraged situations are automatically closed out. Coinglass says that this week, more than $2 billion in long and short crypto holdings were lost. More liquidations happen when prices go down, which makes prices go down even more.

It has lost more than half of what it was worth at its peak in October. Other coins, like Ether and XRP, have dropped more in percentage terms.On CNBC's "Worldwide Exchange," Maja Vujinovic, CEO of FG Nexus, said that the big bull run that everyone was waiting for hasn't happened yet. Bitcoin is only trading on basic liquidity and capital flows right now, and there isn't as much excitement around it as there used to be. Prices are going down because there aren't any new stories to keep people interested.

A big change is happening in schools and other institutions. People used to say that hedge funds and big businesses were the ones who kept the price of Bitcoin stable and raised it. According to CryptoQuant's most recent report, institutional demand has shifted from buying to selling. In the last year, U.S. ETFs bought 46,000 Bitcoin. Now they are selling them. That's a big change, so even the "smart money" is starting to doubt it.

The technical indicators are also in the red. Bitcoin has dropped below its 365-day moving average for the first time since March 2022. This is a trendline that takes out the daily noise to show the bigger picture. Since that breach, it has dropped 23% in just 83 days.That's more than it dropped during the bear market of early 2022. A lot of traders use moving averages, and when one crosses below another, it usually means that a long-term decline is starting.

CryptoQuant says this could raise prices to between $60,000 and $70,000. If support levels break, things could get worse. People who got it early mined it on their own computers, and it was worth a few cents. The boom in 2017 made it popular with a lot of people. It reached its highest point at about $20,000 before going down. This cycle has had higher highs and lower lows than the others, but this one feels different—maybe more grown-up but also more closely watched.

For a long time, critics have said that Bitcoin's value isn't real, but is instead based on speculation. Gold has real-world uses, but Bitcoin doesn't. Stocks have real-world uses, but Bitcoin doesn't. It doesn't depend on people believing in its limited supply (21 million coins) and network effects. But that faith is fading as adoption slows down—big companies like Tesla briefly accepted it as payment but then backed off—and rules are getting stricter around the world. The SEC's control over ETFs in the U.S. worked, but there is still some confusion because people are still arguing about whether they are securities or commodities.

Worries about the environment haven't helped either. Mining Bitcoin, which uses proof-of-work, takes a lot of energy, which is sometimes compared to the amount of electricity that small countries use.Some miners are switching to renewable energy, but investors who care about the environment still have a problem with the carbon footprint. Then there's competition. Ethereum became faster when it switched to proof-of-stake, and newer chains like Solana say they can handle more transactions. But even these are failing now, which shows how weak the whole business is.

What's next? Some people think it might be useful in the real world, like sending money to people in poor countries or protecting yourself from hyperinflation in places like Argentina or Turkey. But people who don't believe in it say it's just digital speculation if it doesn't get more popular. This is a hard lesson for regular investors because they can't count on it. A lot of people got in when prices were high because they heard stories of people who became billionaires overnight.

Paper losses are going up now that prices have dropped by half. You shouldn't put all your money into bitcoin; you need to spread it out.Experts in finance usually say that you should only have 5–10% of your portfolio in this asset class because it is so risky. There are strong doubts on both sides, and the market is forcing people to deal with them. When prices settle down or maybe even drop more, keep an eye on those important levels.

The next fight could be over $60,000. The "digital gold" glitter has faded for now, and it will take more than just time to build trust again. It will also take real progress in usefulness and adoption. This episode shows how dangerous it is to put money into new markets like bitcoin. There is no one in charge to help, and there are no bailouts. The market is just doing its thing, and leverage and changes in mood make it stronger. Maybe the lesson is to have lower hopes as we go forward. Bitcoin is not a way to get rich quickly; it is a technology that is still changing. This time, the crypto winter feels colder, whether it comes back or keeps going down.