Bitcoin took a hard hit on Thursday, crashing along with the rest of the risk-heavy markets after stocks suddenly reversed earlier gains. The drop was steep enough that more than $1 trillion has now vanished from the crypto market since early October, when the total value of all cryptocurrencies sat around $4.2 trillion. As of Thursday, that number had fallen to under $3 trillion.
The trouble really began back on October 10, when a massive wave of forced selling sent the crypto world into shock. It turned into the largest liquidation event in Bitcoin’s history, with investors dumping around $19 billion in leveraged trades-some say it may have been closer to $30 billion.
Since then, the market hasn’t recovered. Bitcoin has been sinking for weeks, dragging almost every other crypto down with it. On Thursday, the coin was trading at $86,398, more than 31% below its early October peak of over $126,000. That means Bitcoin is now down more than 5% for the year, officially slipping into negative territory.
Even longtime believers are starting to worry as the slump continues. A report from crypto investment firm 21Shares says big customers are selling, and Bitcoin exchange-traded funds (ETFs) are seeing steady withdrawals. According to the report, long-term holders have sold around 42,000 Bitcoin worth almost $4 billion just this month. On Thursday alone, ETF outflows hit $866 million, the second-biggest ever recorded.
The firm points to a mix of technical issues and economic pressure, including forced liquidations, thin liquidity, and concerns that the Federal Reserve may not cut interest rates soon, which tends to hurt assets like crypto.
Satraj Bambra, CEO of crypto trading platform Rails, says the damage from October’s crash is still unfolding and the market feels extremely fragile.
He thinks Bitcoin might be nearing a “local bottom” and could see a short-term bounce. But he warns that if buyers don’t come back with strength, the decline could continue.
“We’re still in a shaky environment,” he said. “Right now, the burden is on the bulls to prove the market can recover.”
