Bitcoin is making a comeback after a significant downturn that recently dragged its value down to $60,000, amidst widespread turmoil in the cryptocurrency market.

Initially, the digital currency kicked off the week hovering around $77,000 but then took a sharp dive, plummeting to nearly $60,000—a level not seen in 16 months.

Though it has bounced back to about $65,000 as of this morning, Bitcoin has shed almost half of its worth in just over four months, having peaked at an all-time high of $122,000 back in October.

This current valuation marks its lowest point since October 2024, a time notably just before Donald Trump, who voiced support for the crypto market, secured the presidency.

Recent days have seen the sell-off accelerate, with prominent figures such as Michael Burry adding their voices to the skepticism surrounding cryptocurrencies.

Bitcoin dive: The price of the cryptocurrency has plummeted this week

Burry, renowned for predicting the 2008 financial meltdown, described Bitcoin as ‘exposed as a completely speculative asset,’ warning that the declining price might lead to a ‘death spiral.’

Bitcoin is touted as a hedge against volatility, but it has declined in tandem with other assets, including precious metals and tech stocks this week.

Richard Farr, chief market strategist at Pivotus Partners, set a price of target of zero for bitcoin and said the cryptocurrency had failed to function as a hedge and operates as ‘a speculative instrument correlated to the Nasdaq.’

Bitcoin is down 16 per cent over the week, taking its losses for the year to 26 per cent.

Other cryptocurrencies have been caught in the sell-off too. Ether, which is trading up 3 per cent this morning, has shed 17 per cent over the week, with losses of nearly 37 per cent since the start of the year.

What’s behind the selloff?

The crypto rout has occurred at the same time as a heavy sell-off in gold and silver and in tech stocks, as investor concerns over AI deepen.

It suggests cryptocurrencies, which were once promoted as a place to park money during market turbulence, no longer serve their original purpose.

‘Traditional markets remain an important swing factor,’ said Joel Kruger, markets strategist at Lmax Group. 

‘Yen weakness tied to Japan’s election outlook, easing eurozone inflation, and ongoing uncertainty around U.S. growth and labor momentum continue to shape global risk appetite.

‘The dollar has stayed modestly supported, yields remain firm, and geopolitical headlines — from Middle East tensions to shifting fiscal expectations — are keeping investors selective, all of which has limited crypto’s ability to participate in broader risk rallies.’

The sell-off was also triggered by Trump’s nomination of Kevin Warsh as the new chair of the Federal Reserve, said Deutsche Bank. 

His ‘hawkish’ approach could keep interest rates higher, which would have a negative effect on the crypto market.

There are other crypto-specific dynamics adding to investor nerves, too.

‘Expectations had become stretched around the idea that bitcoin would not revisit sub-$100,000 levels, and when Q4 failed to deliver the upside momentum many had priced in, positioning quickly unwound,’ said Kruger.

While this week has seen the sell-off pick up pace, there has been a steady decline in bitcoin’s price since October 2025.

‘The steady selling in our view signals that traditional investors are losing interest and overall pessimism about crypto is growing,’ Deutsche Bank said in a note to clients.

It added that bitcoin is unlikely to return to its previous highs.

Kruger predicts while there may be more near-term volatility in the cryptocurrency, ‘the market is moving closer to a meaningful base rather than further away from one.’

Chris Beauchamp, chief market strategist at IG said: ‘Beleaguered investors will be asking if that was it, after a plunge that has seen the price of bitcoin halve since the October highs. 

‘Despite all the commentary around bitcoin’s apparent demise, this sell-off still pales in comparison with previous crypto winters. 

‘While the arguments for why it is past its peak are strong, history suggests it has plentiful powers of recuperation.’

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