In the past few days, the entire cryptocurrency market feels like the 'sky has fallen,' with a severe drop that has left many new and old players stunned. Bitcoin led the plunge, and mainstream coins and altcoins have dropped to alarming levels. Let's break this down in simple terms to see what happened, why it fell so drastically, and what to expect next.
1. What has happened to Bitcoin?
Current price: has completely dropped below $70,000, with a minimum hitting just over $60,000, roughly in the range of $60,000~$61,000.
How severe was the drop? In the past 24 hours, it fell by 10%-15%, and at some points, it was even more exaggerated.
From the peak last October (which surged above $100,000) to now, Bitcoin has fallen by 40%-50%. In plain terms, this is a standard 'bear market decline.'
From a technical perspective: there is a key support around $58,000-$60,000 in the short term, which is the position of the 200-day moving average, and many people regard it as the 'bottom line.' Once this position is broken, it may be necessary to look further down for support.
The RSI indicator has already dropped to a historically rare low, a situation that has only occurred twice in the past. Some veteran investors believe this might be a precursor to a 'violent rebound,' but the pressure is still immense.
2. Why did it fall like this?
This round of plummeting is not accidental; there are several obvious driving forces behind it:
1️⃣ The whole world is selling risk assets
It’s not just the crypto market; recently tech stocks are also crashing, U.S. Treasury yields are rising sharply, coupled with tightening macro liquidity, money in the market is becoming increasingly scarce. Investors are panicking, whether in stocks or cryptocurrencies, selling first and prioritizing capital preservation. This panic sentiment has also directly spread to the crypto market.
2️⃣ Liquidations continue, blood flows like a river
In the past few days, the total liquidation amount across the network has exceeded $600-800 million several times, and almost all are long positions (i.e., bullish positions that got buried). The worst hit is the publicly traded company MicroStrategy, which holds the most Bitcoin globally; it reported a staggering loss of about $12.4 billion in Q4 due to Bitcoin's crash, causing its stock price to plummet, further exacerbating market panic. As of the end of 2024, the company holds approximately 446,400 Bitcoins, with an average purchase price of about $62,428; now its stock price has almost returned to its original value with significant unrealized losses.
3️⃣ Unclear policies, no one is saving the market
The uncertainty of regulatory policies has become the 'last straw' that breaks the market's back. Recently, U.S. Treasury Secretary Scott Bessenet clearly stated that the U.S. government has no power to rescue cryptocurrencies and will not intervene. Additionally, rumors of tightening cryptocurrency regulations in the EU and the U.S. have been fermenting in the market; everyone fears that once regulation arrives, their coins will lose value, leading to a frenzy of selling.
4️⃣ Other black swan events
Other external factors are adding fuel to the fire. For example, geopolitical tensions, instability in the Middle East, coupled with thin market liquidity over the weekend, can amplify declines with just a small amount of selling, making an already fragile crypto market fall even harder.
3. Other currencies are also hard to escape the calamity
Ethereum (ETH): dropped alongside Bitcoin, once falling below $2,000, and some large holders (whales) may face 'liquidation' crises. Founder Vitalik has also publicly criticized some Layer 2 projects as too 'watered down,' and expressed dismay at the collapse of meme coins related to Trump.
Public chain coins like Solana: the drop is even larger than BTC, and SOL is also near breaking its support.
From the overall market perspective, the total market capitalization of cryptocurrencies has significantly evaporated from last year's peak, with reports indicating that the total market capitalization has nearly halved in recent months. Although some institutions are still net buying Bitcoin through ETFs, the spot demand from ordinary investors has clearly dried up, and no one dares to easily enter the market to take over. Market activity has dropped to an all-time low. Analysts have stated that the previous inflow of ETF funds supporting Bitcoin's price has now also clearly slowed down, and even net outflows have occurred, which is undoubtedly adding insult to injury for the market.
4. What are people in the crypto world saying?
Opening X, it’s a scene of desolation: some are crying while others are laughing, emotions are completely divided.
Many investors exclaim 'blood is flowing like a river' and 'the bear market has really come,' while many share screenshots of their bottom-fishing attempts, complaining about buying in too early, incurring greater losses, and some even directly facing liquidation, losing their capital overnight, stating 'I will never touch crypto again.' Others jokingly say 'everyone is celebrating the slaughter of the dog coins,' with a screen full of loss-related complaints.
On the other hand, there are a few analysts and 'old coin holders' calling for a rebound: they state that Bitcoin has rebounded nearly 10% from its recent low, with a short-term rebound target looking at $68,000-$74,500. However, they repeatedly remind that whether the rebound can be successful depends on the volume-price combination. If there is no capital entering the market, the rebound could be just a fleeting moment, likely a trap for more buyers. Some who believe in 'contrarian investing' shout 'buy when there’s blood in the streets,' but this sentiment is quickly drowned out by panic criticisms.
Summary: The emotions are extremely polarized—some self-deprecate saying 'the crypto dogs have all been cut,' while others insist 'when others are fearful, I am greedy,' preparing to bottom fish amid the chaos.
Honestly, this wave of decline is fierce; it is not a simple technical adjustment, but a 'multiple blow' under the macro environment + emotional collapse + policy pressure. For most ordinary investors, the most taboo thing now is 'blindly bottom-fishing,' because what you think is the bottom might just be halfway down.
However, if you are inherently optimistic about this industry and can withstand volatility, now is indeed a window period to observe quality projects and gradually layout. After all, every deep decline often bears the next round of opportunities.
Conclusion: This wave of market movement reminds us once again: One day in the crypto world is like a year in the real world. Prices rise quickly and fall even faster. Don’t easily go all in, and definitely don’t use excessively high leverage. The most important thing right now is to control risks and see the direction clearly before taking action. Stay steady, don’t panic, and don’t leave the table; only then will you have the chance to see the next round of a comeback.
As a final reminder: The crypto market is currently in a bear market correction phase; panic sentiment has not completely dissipated, and whether bottom-fishing or chasing rebounds, the risks are immense. Moreover, cryptocurrency trading is not protected by law in our country, and there have been multiple warnings about the risks of virtual currency trading speculation; everyone must exercise caution and not be blinded by temporary fluctuations. Preserving capital is the most important.
Disclaimer: The content herein is for reference only and does not constitute any investment advice. Investors should consider their own risk tolerance and investment objectives, rationally view cryptocurrency investments, and avoid blindly following trends.