Bitcoin plummeted as low as $60,000 last week in its worst weekly decline in three years — and many investors are betting that the roller coaster ride isn’t over.
The cryptocurrency plunged 16% last week to $70,008 – down 45% from its all-time high of $126,273 last October and wiping out all gains since President Trump’s re-election in 2024.
Ether also dropped 24% last week to $2,052, off 59% from its record high last year.
Nevertheless, bearish bets against Bitcoin have ramped up – and there are several indicators suggesting that any breach of the $60,000 level would unleash an intense bout of price turbulence.
Buying and selling Bitcoin “is an entirely speculative play on what others will do,” Kenin Spivak, chairman and CEO of SMI Group LLC, told The Post. “Bitcoin will continue to widely fluctuate in value. It is not for the faint of heart.”
The largest group in Bitcoin’s options market are contracts that pay if the price falls below $60,000, according to Deribit data cited by Bloomberg.
Many Bitcoin-backed loans are structured to automatically sell off collateral to cover losses if Bitcoin falls below that level – which could cause an avalanche of unwinding, Maxime Seiler, chief executive of digital-asset trading firm STS Digital, told Bloomberg.
Investors expect Bitcoin to experience more swings. Michael Burry, whose bet against the US housing market ahead of the 2008 crash inspired “The Big Short,” recently warned that Bitcoin’s fall last week could worsen into a “death spiral.”
In the meantime, the $60,000 to $74,000 range will likely emerge as a key “battleground” for Bitcoin to break from “ahead of clearer signals on whether this range becomes a base for recovery or a pause before further downside,” analysts at Bitfinex said in a report Monday.
A “perfect storm” of conditions pushed traders to sell Bitcoin ahead of its huge losses last week, according to Mahoney Asset Management CEO Ken Mahoney.
The Japanese yen carry trade has turned into a “ticking time bomb” and is vulnerable to an unwinding, according to BCA Research analysts. Such an unwinding is highly correlated with a Bitcoin selloff, since many investors borrow the yen at low interest rates to buy high-yield assets like crypto.
President Trump also recently announced his pick to lead the Federal Reserve, former Fed Governor Kevin Warsh – who some investors fear is too hawkish on interest rates.
Though Trump has relentlessly pressured the Fed to slash interest rates at a faster pace, Warsh was more concerned with inflation risks than unemployment during his five years at the Fed – which typically aligns with rate hikes.
Some crypto experts have also been questioning whether Bitcoin buyers are simply losing enthusiasm and turning to prediction markets, an emerging option for risk-tolerant investors.
Bitcoin has long been hailed as a hedge against inflation – but it hasn’t seen the same success as gold, which broke past $5,000 last month for the first time ever.
Investors flocked to the precious metals market amid anxiety around Trump’s tariffs and their potential to cause inflation, stubbornly high interest rates and a weaker US dollar.
“The issue with Bitcoin is that it needs energy to be mined and essentially exist, whereas gold does not,” Mahoney told The Post.
Timot Lamarre, director of market research at Unchained, a Bitcoin-native financial services firm, said there is “definitely an element of ‘gold is familiar.’ People understand gold.”
Massive central-bank purchases last year also contributed to gold’s explosive rise. JPMorgan expects central banks to buy another 800 tons of gold in 2026.
Bitcoin’s drop came alongside an intense tech stock sell-off last week that saw more than $1 trillion wiped from Big Tech stocks like Microsoft, Alphabet, Nvidia, Meta and Oracle.
Goldman Sachs’ Panic Index at one point hit 9.22, nearing “max fear” level as investors feared companies could be overspending on AI – potentially causing a “dot-com bubble” repeat.
Some crypto enthusiasts have remained bullish on Bitcoin, arguing that losses were merely the result of investors claiming profits following massive rallies last year.
“This pullback looks like a normal reset for a maturing asset class, and a momentary bump on the path toward crypto’s larger role in the future of money,” Stephen Pair, co-founder and CEO of BitPay, an app that allows investors to buy and store crypto, told The Post.
Anthony Pompliano – an influential crypto investor known to fans simply as “Pomp” – argued there was probably a psychological sell-off incentive once Bitcoin passed the $100,000 mark.
“If you held Bitcoin for a long time, you hit $100,000 – there are some people who just said, ‘This is enough for me. Step off the train,’” Pompliano told CNBC’s “Squawk Box” Monday.
There is also some frustration in the crypto community since federal legislation seeking to establish guidelines for digital assets has been stalled in the Senate, and the government has yet to buy up Bitcoin in bulk, according to Lamarre.
“It’s not what people had expectation-wise,” he said of Trump’s promises to create a Strategic Bitcoin Reserve and ease regulatory oversight on the industry.
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