Bitcoin has fallen below the $79,000 threshold, joining a broader global market downturn. This decline follows the announcement of restrictive global trade policies by the U.S. government, which triggered the most significant stock market drop since 2020. As a result, investors are preparing for increased volatility across financial markets.
According to data from cryptocurrency metrics provider Coin Metrics, Bitcoin's price recently decreased by 4%, settling at $78,835.07. For most of the year, Bitcoin had been trading above $80,000, though it has briefly dipped below this level several times amid recent fluctuations. The current price represents a decline of approximately 34% from its all-time high reached in January.
As the flagship cryptocurrency, Bitcoin often trades similarly to major tech stocks and is frequently viewed by traders as a leading indicator of market sentiment. Interestingly, last week, it defied the broader market sell-off, maintaining a range between $82,000 and $83,000. It even ended the week with gains as equity markets plummeted and gold prices fell.
Other cryptocurrencies experienced even steeper losses overnight. Ethereum (ETH) and tokens associated with Solana (SOL) each plunged by about 10%.
This sharp decline in Bitcoin triggered a wave of long liquidations, where traders who had bet on rising prices were forced to sell assets to cover losses. Data from crypto analytics platform CoinGlass shows that Bitcoin long liquidations exceeded $181 million over the past 24 hours. During the same period, Ethereum long liquidations reached $188 million.
Market Reactions and Global Impact
The sell-off was primarily driven by investor panic over new restrictive trade policies, which raised fears of a global economic recession. In response, traders rushed to offload risk assets, including cryptocurrencies. Since crypto markets operate 24/7, this selling pressure continued throughout the weekend.
According to S&P Dow Jones Indices, the global stock market lost approximately $7.46 trillion in market capitalization over two trading sessions following the policy announcement. This figure includes a $5.87 trillion loss in U.S. equities and a $1.59 trillion decline across other major global markets.
Bitcoin Performance in 2025
Throughout much of 2025, Bitcoin has traded above $80,000. However, it is now down about 15% year-to-date. In the absence of cryptocurrency-specific catalysts, Bitcoin is expected to continue moving in tandem with stock markets, as concerns about a potential global recession overshadow any positive regulatory developments that might have otherwise benefited the crypto sector this year.
Investors are closely monitoring the situation, looking for signs of stabilization or further volatility. Many are diversifying their portfolios or exploring hedging strategies to manage risk during these uncertain times.
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Frequently Asked Questions
Why did Bitcoin drop below $79,000?
Bitcoin's decline is part of a broader market sell-off driven by new U.S. trade policies, which heightened fears of a global economic recession. Investors responded by reducing exposure to risk assets, including cryptocurrencies.
How are other cryptocurrencies performing?
Other major cryptocurrencies, such as Ethereum and Solana, faced even steeper losses, each dropping around 10% in a short period. This indicates widespread caution across the digital asset market.
What are long liquidations?
Long liquidations occur when traders who borrowed funds to bet on rising prices are forced to sell their holdings due to sudden price drops. This amplifies downward momentum and contributes to market volatility.
Is Bitcoin still a safe haven during market turmoil?
While sometimes considered a hedge, Bitcoin has recently correlated more closely with traditional risk assets like tech stocks. Its performance during this sell-off suggests it is currently viewed as part of the broader risk asset category.
Will regulatory developments help Bitcoin recover?
Although positive regulations could support long-term growth, short-term price movements are currently dominated macroeconomic concerns and global market sentiment.
What should investors do during such volatility?
Investors should avoid panic selling, consider diversification, and use risk management tools. Staying informed through reliable market analysis is also crucial.