Here’s a detailed summary of why Bitcoin dropped from $126,000 to $60,000, based on recent news and market analysis:
1. Structural and Market Factors
A large portion of Bitcoin trading now happens in derivative and synthetic markets (futures, options, ETFs, etc.), amplifying price movements.
Forced liquidations and selling by exchange-traded funds (ETFs) accelerated the downside, causing rapid price drops even without major spot selling.
Over $2 billion in positions were liquidated as Bitcoin tested the $60,000 threshold, creating cascading effects.
2. Macro and Global Risk-Off Environment
Global financial markets have been volatile, leading investors to reduce exposure to riskier assets like Bitcoin.
Slowing growth indicators, credit stress, and recession concerns triggered broader de-risking cycles, with crypto experiencing larger drawdowns due to its volatility.
Rising geopolitical tensions and global uncertainty increased defensive positioning, with capital moving toward safer assets.
3. Institutional and Economic Signals
The sell-off was more structured, driven by institutional repositioning and gradual exposure reduction rather than panic selling.
Market expectations around future liquidity conditions shifted, and delayed monetary easing led to repricing across risk assets.
Bitcoin rebounded slightly after falling to $60,000, but sustained upside may remain limited until macro conditions and leverage levels stabilize.
Summary Bitcoin’s drop from $126,000 to $60,000 was caused by a combination of leveraged derivatives activity, ETF selling, global risk-off sentiment, macroeconomic uncertainty, and institutional adjustments. Relief rallies may occur, but sustained upside is likely limited until macro conditions and leverage stabilize.$BTC
