MUMBAI, India — Bitcoin extended its recent selloff on Friday, falling more than 6% to around $66,200, as global risk aversion, heavy liquidations, and continued weakness in technology stocks pressured digital assets.
The world’s largest cryptocurrency had already suffered its sharpest single-day decline since late 2024 on Thursday, dropping 12.6% to about $63,300, its lowest level since October 2024. The move erased billions of dollars in market value and intensified concerns about broader stress across risk assets.
Market analysts said the pullback reflected a broader retreat from high-risk investments, with volatility spilling over into cryptocurrencies from equities and other asset classes. Weakness in technology stocks, particularly software and AI-linked names, has closely tracked bitcoin’s decline as investors cut exposure across correlated sectors.
Data from crypto market analytics firms showed that nearly $1 billion worth of bitcoin positions were liquidated within 24 hours, largely driven by forced exits among leveraged traders. The cascade of liquidations added to selling pressure across the broader crypto market. Bitcoin is down more than 20% for the week, nearly 29% over the past month, and about 33% on a year-over-year basis.
Ether, the second-largest cryptocurrency, also saw sharp losses, falling more than 13% in a single day and declining nearly 38% so far in 2026.
Market participants said the current downturn appears more consistent with a prolonged reset rather than a short-term correction, citing similar patterns in previous market cycles that took months to stabilize.
Sentiment has also been hit by concerns over tighter U.S. monetary policy. Investor caution increased after U.S. President Donald Trump nominated Kevin Warsh as his choice for Federal Reserve chair, raising expectations of a more hawkish policy stance. Analysts said fears of balance-sheet tightening and reduced liquidity have weighed heavily on assets that benefited from abundant liquidity in recent years.
Additional pressure has come from sustained institutional outflows. U.S. spot bitcoin exchange-traded funds recorded withdrawals of more than $3 billion in January, signaling waning institutional appetite amid heightened volatility.
Market watchers also cautioned that further price declines could trigger forced selling among crypto miners, particularly if falling prices lead to cash flow stress.
Despite near-term pressure, bitcoin’s strategic profile has continued to evolve. In 2025, the United States announced the creation of a Strategic Bitcoin Reserve, a move widely viewed as a sign of growing institutional and governmental acceptance of digital assets within the broader financial system. (Source: IANS)
