Bitcoin Extends Selloff as Macro Pressures and Leverage Unwind
Bitcoin fell below $72,000 for the first time since November 2024, trading around $71,400—down 6% on the day and nearly 43% from its October all-time high. Over $654 million in crypto liquidations occurred in 24 hours, with Bitcoin accounting for $272 million. Analysts attribute the sell-off to macroeconomic uncertainty, President Trump’s Federal Reserve Chair nomination, and geopolitical tensions, alongside long-term holders reducing exposure and skepticism about Bitcoin’s role as an inflation hedge, especially as gold rises. While the long-term investment thesis remains intact, confidence in the inflation-hedge narrative has weakened, and there is room for further downside, possibly toward $60,000 if the corrective trend continues. Current volatility is driven by leverage unwinding and inconsistent ETF flows, leading to expectations of a consolidation period. Despite entering “oversold territory,” any recovery will likely depend on stabilizing leverage, slowed ETF outflows, and renewed spot demand. Analysts advise patience, with near-term conditions unfavorable and further pressure possible before stabilization.
