Bitcoin has fallen to its lowest level since before the 2024 election.
The token is deep in a bear market, down as much as 37% from its October peak, briefly dropping below $75,000 on Monday before edging back up to around $78,500.
At the heart of the latest sell-off has been the big sentiment shift in speculative momentum trades, particularly gold and silver. The brutal sell-off that tanked metals prices spilled over into bitcoin, analysts say.
According to Coinglass, January 30 was the 10th largest liquidation event in bitcoin’s history, with $2.5 billion in positions sold. October 10, 2025’s liquidation — right at the start of the current bitcoin bear market — was the largest ever, at $19.1 billion.
Bitcoin tends to track other risk assets, and gold and silver have been behaving less like safe havens and more like momentum stocks in recent weeks.
The breakdown in their price on Friday was the latest factor to weigh on crypto, but disappointments had been mounting for bitcoin investors for months.
In 2024, Trump campaigned on making the US the “crypto capital of the world,” promising crypto-friendly regulation and the creation of a strategic bitcoin reserve. But the enthusiasm has since waned and the regulatory bonanza seems to have been fully digested by markets while other more bearish factors have played into its price.
For one, speed bumps like trade wars, a sluggish labor market, and government shutdowns, investors have been wary of riskier assets.
The most recent development driving the risk-off sentiment is Trump’s appointment of Kevin Warsh to lead the Fed. While Warsh has called for lower rates since Trump’s election, he has historically favored a more hawkish policy.
Bitcoin and other risk assets like growth stocks tend to thrive in low-rate, easy-money environments.
Warsh’s appointment probably bleeds into the second reason behind the decline: the sharp declines in the price of silver and gold. That’s according to Kyle Rodda, a senior financial market analyst at Capital.com.
“Given the build up of positioning and leverage involved, the sell-off is bleeding into other markets. Effectively, a deleveraging is happening, forcing traders to sell other assets to cover losses on their losing precious metals positions. That’s contributing to the sell-off in stocks and probably contributed to Bitcoin’s plunge over the weekend.”
He added: “Every bubble needs a pin to pop it and the nomination of Kevin Warsh to replace Jerome Powell as Fed Chair was the prick this time.”