Bitcoin crashes below $70,000 for first time in over a year. Is crypto headed for a market reset?

By Joseph Adinolfi

The price of the pioneering digital currency fell to its lowest level since October 2024 on Thursday

Bitcoin prices fell to the lowest level in more than a year on Thursday.

Bitcoin prices fell below $70,000 a coin on Thursday as a painful crypto rout deepened, sending the price of the pioneering digital asset to its lowest level in nearly 16 months.

Prices traded (BTCUSD) as low as $65,262 in recent trading, down 11% on the day. That marked the lowest level seen in the 24-hour-a-day bitcoin market since Oct. 23, 2024, according to Dow Jones Market Data and the CoinDesk Bitcoin Price Index. It has now wiped out all of its gains since President Trump's electoral victory over former Vice President Kamala Harris.

Bitcoin and most other cryptocurrencies have been sliding since bitcoin prices hit a record peak back in October. The pace of the decline picked up over the weekend, when bitcoin was shunted lower by what one market observer described as a massive wave of liquidations in the crypto space that has continued to accelerate.

According to Antonio Di Giacomo, senior market analyst at XS.com, the nomination of Kevin Warsh as President Donald Trump's pick to succeed Federal Reserve Chair Jerome Powell has helped to heap more pressure on the crypto space, helping to wash out traders who were holding leveraged long bets on cryptocurrencies in the derivatives market and the spot market.

The prospect of Warsh at the helm of the Fed has crypto traders more concerned about the impact of a potentially restrictive monetary regime. Although Warsh has recently pushed for lower interest rates, he has been a longtime critic of the size of the Fed's balance sheet. But curbing the balance sheet could, in theory, limit liquidity in the banking system and weigh on prices of more speculative assets like bitcoin.

Large institutional players have also grown more cautious on crypto, Di Giacomo said. Others said the bitcoin price has reached a critical threshold and that the selloff is beginning to resemble a more enduring shift into another market reset. Since bitcoin was first launched more than 15 years ago, it has become known for huge rallies followed by punishing pullbacks that have sometimes taken years to reverse.

"It is clear the crypto market is in full capitulation mode," said Nic Puckrin, investment analyst and co-founder of Coin Bureau. "If previous cycles are anything to go by, this is no longer a short-term correction, but rather a transition from distribution to reset - and these typically take months, not weeks."

Bitcoin whales have been involved in much of the selling, Puckrin said.

More money has also been flowing out of spot bitcoin ETFs lately, even if the magnitude has been relatively modest relative to the total assets under management, according to FactSet data. Moreover, ETF investors appeared eager to buy the bitcoin dip this week; a group of 12 ETFs that hold spot bitcoin actually registered their biggest inflows since early January on Tuesday and Wednesday, Dow Jones Market Data showed.

Bitcoin wasn't the only crypto coming under pressure on Thursday. Ethereum prices (ETHUSD) were down by more than 11%, and Solana (SOLUSD) was down sharply as well, FactSet data showed.

Idoia Linacero contributed

-Joseph Adinolfi

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02-05-26 1519ET