Wall Street closes at a record for the first time since end of January
Investing.com -- Bitcoin on Tuesday erased all its gains since President Donald Trump’s election victory in early November 2024. The selling has not let up on Wednesday, with the world’s largest cryptocurrency briefly falling below $72,000.
The cryptocurrency has now cratered about 42% from its record high of more than $126,000 last October, and is well and truly in a bear market.
Bitcoin had soared in 2025 over hopes of more favorable regulation from the Trump administration, spot ETF inflows, and institutional adoption. However, the asset has been in a freefall since hitting its record high, with losses intensifying in 2026.
“Long liquidations and sensitivity to downside in equities and geopolitical risk have weighed on Bitcoin and crypto markets thus far,” Citi Research analyst Alex Saunders said on Tuesday.
“Since Oct 10th last year, we have seen a notable downshift in the flows to U.S. spot ETFs which is a large source of potential new money into the space in our view. This lack of new demand coincided with established long-time holders becoming concerned about cyclical weakness in Bitcoin,” Saunders said.
Approaching key levels
Bitcoin on Wednesday fell as much as 5% to a session low of $71,913.4, its lowest level since early November 2024.
“We believe Bitcoin prices are approaching key levels. We are now below our estimated average U.S. spot-ETF entry price $81.6k and close to the c. $70k pre-U.S. election price,” Citi’s Saunders said.
According to the analyst, landmark U.S. legislation that passed the House in July 2025 and is currently held up in the Senate is seen as “a catalyst for renewed investor-interest.”
“We have seen some progress on a Senate bill to be reconciled with the House-passed CLARITY act to start the year. The Finance committee released a draft although it was not met with universal approval and the vote out of committee has been delayed. Senate Ag also advanced its version of the bill,” Saunders noted.
“Positive news on the regulatory front would be an important catalyst in boosting sentiment and flows in our view,” he added, highlighting examples from history such as increased ETF inflows following the U.S. election and the passage of the U.S. Genius act in July 2025.
No ‘sign that something broke in crypto’
Analysts also believe that bitcoin’s current downturn is not indicative of anything bigger than simple bull and bear cycles.
“Bitcoin’s recent price action isn’t a sign that something broke in crypto - it’s a reflection of where we are in the broader macro cycle. We clearly overshot earlier, pricing in a straight-line move higher that was never realistic,” Gil Rosen, co-founder of the Blockchain Builders fund, told Investing.com.
“What followed wasn’t a crypto-led collapse, but a reset driven by geopolitics, tariffs, and policy uncertainty. As institutional capital has taken the wheel, Bitcoin is now treated much more like a risk asset, so when macro gets shaky, capital rotates out and price feels it,” Rosen added.
Meanwhile, Nicholas Motz, CIO of Soil.co and CEO of ORQO.digital, believes that the violent unwind in the precious metals trade at the end of last week led to a broad risk-off move across all assets.
“When funds get squeezed on safe havens, they often liquidate their most liquid and profitable positions, such as Bitcoin, to cover losses elsewhere. We are seeing a forced de-leveraging event, not a fundamental shift in crypto adoption,” Motz told Investing.com.
Senad Karaahmetovic contributed to this article
