Why Bitcoin Faces Mounting Pressure After a Brutal Week: Key Factors Revealed

Introduction: A Tough Week for the King of Crypto

Bitcoin has had a rough ride lately. After dropping below $80,000 for the first time since early 2025, the world’s top cryptocurrency is showing signs of strain. As of Monday morning, Bitcoin traded around $77,926, up slightly by about 1% but still down 12% over the past seven days. This wipeout erased over $200 billion from the Bitcoin market cap.

What’s behind this ? In this post, we’ll break it down step by step. From global market jitters to massive liquidations, we’ll explain the main drivers in simple terms and look at what might happen next.

The Big Picture: Bitcoin Mirrors Broader Market Woes

Bitcoin doesn’t move in a bubble. It often follows risk assets like stocks. Last Friday, U.S. stocks tumbled, especially tech giants. Microsoft shares fell 10% after weak earnings, dragging down the Nasdaq. This negativity spread to Europe and Asia on Monday.

Even safe havens struggled. Gold and silver kept dropping, with silver posting its worst day since 1980 – down 30% on Friday. Experts say Bitcoin’s fall matched this “risk-off” mood across global markets.

• Key Correlation: Bitcoin acts like a high-risk tech stock during volatile times.
• Weekend Effect: Thin trading volumes amplified the drop over the weekend.

No major crypto-specific bad news triggered this. Instead, low liquidity on weekends made prices swing wildly.

Cascading Liquidations: The Domino Effect in Crypto

One big factor was forced selling, known as liquidations. When traders use leverage (borrowed money), exchanges auto-sell positions if prices hit stop-loss levels. Since Thursday, over $2 billion in Bitcoin long and short positions got wiped out.

Saturday alone saw $2.56 billion in crypto liquidations across all coins – the 10th biggest single-day event ever. This creates a vicious cycle:

1. Price drops a bit.
2. Leveraged positions get liquidated.
3. More selling pushes prices lower.
4. Even more liquidations follow.

Bitcoin hit a low of $74,876 before bouncing back slightly. These events highlight crypto’s high volatility, especially with leveraged trading.

Investor Sentiment Turns Sour: Outflows Signal Caution

Money is flowing out of Bitcoin products. Last week marked the second straight week of outflows, totaling $1.7 billion. Year-to-date, it’s $1 billion in net outflows. This shows fading investor interest.

Why now? Rising geopolitical risks play a role. Tensions worldwide make people pull back from risky bets like crypto. Precious metals’ breakdown removed one safe option, pushing more selling.

Other coins suffered too. Ether and XRP dropped alongside Bitcoin in the recent sell-off.

Fed Chair Speculation Adds Uncertainty

Markets watch the Federal Reserve closely. Talk of Kevin Warsh replacing Jerome Powell as Fed chair is stirring things up. Warsh’s views on tighter policy could mean higher interest rates, bad for risk assets like Bitcoin.

Higher rates make borrowing costlier and reduce appetite for speculative investments. Bitcoin, often seen as “digital gold,” still behaves like a growth asset in these scenarios.

Expert Views: Where Could Bitcoin Go From Here?

Analysts offer mixed takes:

• Short-Term Bottom? One expert sees $70,000 as a key level. A bounce from there could signal recovery, unless bigger market shifts hit.
• Bearish Outlook: Some predict a drop to $40,000 this year. This matches past “crypto winters,” where Bitcoin fell 70-80% from peaks. From its all-time high of $126,000 in October, that’s a plausible scenario over 6-8 months.

Bitcoin is down 22% over the last year, underperforming amid volatility forecasts from $75,000 to over $200,000.

Historical Context: Lessons from Past Cycles

Bitcoin has survived worse. After 2021 highs, it crashed over 70%. Each cycle brings hype, peaks, and deep corrections. This brutal week echoes those patterns:

While history rhymes, new factors like ETF approvals and institutional money could shorten recoveries.

What Drives Bitcoin’s Future Price?

Looking ahead, watch these:

• Macro Events: Fed decisions, stock market trends, geopolitics.
• Crypto Metrics: On-chain activity, whale movements, ETF flows.
• Tech Updates: Network upgrades or halving effects (next in 2028).

Bitcoin bulls argue its scarcity and adoption will win long-term. Bears point to overvaluation and regulation risks.

Final Thoughts: Navigating the Storm

due to intertwined global risks, liquidations, and sentiment shifts. While short-term pain persists, history shows resilience. Investors should stay informed, avoid leverage, and think long-term.

Will we see $70K support hold, or a deeper correction to $40K? Only time will tell. Keep an eye on markets this week for clues.

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