Bitcoin fell to a seven-month low on Friday, closing near the USD 80,000 level. Analysts warn that prices could fall further if this support is broken. Ether, the second-largest cryptocurrency, also dropped to a four-month low as investors moved away from riskier assets.
The decline in Bitcoin comes amid concerns over high tech stock valuations and uncertainty about near-term US interest rate cuts. Cryptocurrencies often reflect market risk appetite, and the recent selloff highlights growing investor caution.
Bitcoin is down 12 percent for the week after reaching a record high above USD 120,000 in October. The earlier rally was driven by favorable regulatory changes worldwide. However, last month’s record single-day slump, which wiped out over USD 19 billion in positions, continues to weigh on the market.
Some analysts say Bitcoin is approaching levels where corporate and institutional investors might need to sell to avoid further losses. Standard Chartered estimates that a drop below USD 90,000 could leave half of crypto treasury company holdings “underwater,” meaning worth less than the purchase price.
These companies, which buy Bitcoin and ether for their balance sheets, may be forced to raise funds or sell, adding pressure to the market. Listed firms currently hold 4 percent of all Bitcoin and 3.1 percent of ether in circulation. Analysts warn that the cyclical buying and selling behavior of these companies can amplify price swings.
Overall, about USD 1.2 trillion has been wiped off the total cryptocurrency market value in the past six weeks. Historical trends show that Bitcoin has experienced 75–80 percent declines during previous major selloffs, suggesting prices could fall further if a similar pattern repeats.
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While short-term losses are significant, analysts note that Bitcoin may stabilize over time. Investors are closely monitoring the cryptocurrency market for signs of recovery amid broader economic uncertainty.
