Bitcoin has plunged to its lowest levels since President Trump’s decisive victory in the 2024 election, erasing nearly half of the explosive gains that followed his pro-crypto promises and sending shockwaves through the market. As the price dropped below $70,000 early Thursday, the cryptocurrency’s value has crumbled under a barrage of technical breakdowns, persistent selling pressure, and a sentiment plunge into “extreme fear” territory.
This downturn raises pointed questions about the pace of regulatory reforms under the current administration and the broader economic forces at play, leaving investors to grapple with whether this is a temporary correction or the onset of a deeper bear market.
The story begins with optimism. Following Trump’s reelection in November 2024, Bitcoin surged from around $69,000 to an all-time high of over $126,000 by October 2025. The rally was fueled by expectations of a crypto-friendly White House, including pledges for a national Bitcoin reserve and streamlined regulations to foster innovation.
Market participants piled in, with spot Bitcoin ETFs seeing record inflows and institutional adoption accelerating. Yet, that momentum has reversed dramatically. Since late January 2026, Bitcoin has shed more than 40% of its value, dipping below $70,000 on February 5—the lowest point since the election night itself. This wipeout has vaporized hundreds of billions in market capitalization, catching even seasoned traders off guard.
Analysts point to a confluence of factors driving the selloff. Stifel Financial, a prominent investment firm, has issued a stark warning: Bitcoin could collapse further to $38,000, a level not seen since early 2024. Their assessment draws parallels to past cycles marked by restrictive U.S. monetary policy and waning speculative fervor.
Tighter Federal Reserve actions, including slower-than-expected interest rate cuts amid persistent inflation concerns, have squeezed liquidity across risk assets. Crypto markets, already volatile, have amplified this pressure. Additionally, progress on U.S. crypto regulations has stalled, contrary to the swift changes many anticipated under Trump. Sources familiar with Capitol Hill discussions indicate bureaucratic hurdles and competing priorities, such as trade tariffs and infrastructure spending, have delayed key bills, leaving the industry in limbo.
Technical indicators paint an equally grim picture. Bitcoin has breached critical support levels, including the 0.382 Fibonacci retracement around $93,300 and the 0.236 level near $85,500, which now acts as formidable resistance. Momentum tools like the 20-day exponential moving average, sloping downward near $84,400, and a deeply negative Awesome Oscillator signal accelerating downside.
The broader crypto market cap has slumped to its weakest since April 2025, with altcoins like Ethereum and XRP suffering even steeper losses—Ethereum down nearly 30% year-to-date. Liquidations have been brutal: over $16 billion in futures positions wiped out in the first week of February alone, exacerbating the cascade as leveraged longs were forced out.
Market sentiment has cratered, with the Crypto Fear & Greed Index hitting 11 on February 5—its lowest in over a year and firmly in “extreme fear” mode. This gauge, which measures factors like volatility and social media buzz, reflects a herd mentality shifting from euphoria to panic.
Victor Olanrewaju, a market analyst at CCN, captured the mood succinctly: “The breakdown is clearly technical. Until Bitcoin reclaims resistance near $85,500, it is likely to remain in a corrective phase.”
Persistent outflows from spot Bitcoin ETFs, once a bullish catalyst, have compounded the issue, with institutions rotating out amid global uncertainties. Geopolitical tensions, including escalating trade disputes and Middle East instability, have prompted investors to hedge by dumping riskier assets like crypto.
This isn’t the first time Bitcoin has faced such turmoil, but the context feels different. Historical bear markets in 2018 and 2022 saw drawdowns of 70-80%, yet Bitcoin rebounded to new highs each time, rewarding those who held through the pain. Research from firms like K33 suggests a full repeat is unlikely due to structural changes: greater institutional involvement, maturing infrastructure, and Bitcoin’s evolving role as a hedge against fiat debasement.
Still, whispers of deeper conspiracies circulate—unverified claims from recently unsealed Epstein documents hint at early shadowy investments in Bitcoin’s development, potentially eroding trust. While these remain unproven, they underscore a pattern: what legacy media once dismissed as fringe theories, like government surveillance via digital assets, have occasionally proven prescient.
For everyday Americans, the implications are stark. MicroStrategy’s Michael Saylor, a vocal Bitcoin bull, is down $3.6 billion on his holdings, while Fundstrat’s Tom Lee faces losses exceeding $7 billion. These high-profile hits highlight the moral hazard of over-leveraging in speculative markets, where fortunes can evaporate overnight.
President Trump’s administration has reiterated its commitment to crypto, with Treasury signaling openness to innovation, but actions speak louder. If regulatory delays persist, it could signal a betrayal of the promises that propelled the post-election boom, alienating a key conservative base that views Bitcoin as a bulwark against centralized financial control.
As Bitcoin teeters on the edge, the path forward hinges on reclaiming key levels and restoring confidence. A sustained break below $70,000 could open the door to $65,000 or lower, per technical charts, while a rebound above $85,000 might signal the bottom. Investors would do well to remember Bitcoin’s resilience—born from crisis, it has outlasted doubters before. Yet, in an era of economic uncertainty, blind faith won’t suffice. Vigilance, diversified strategies, and a clear-eyed assessment of policy realities will determine who emerges unscathed from this storm.
