Bitcoin’s Slide Below $80,000 Tests Investor Resolve

The cryptocurrency market is demanding strong nerves from its participants. Bitcoin has dropped below the psychologically significant $80,000 threshold for the first time since April 2025, sparking a frantic search for a price floor. This decline coincides with substantial outflows from exchange-traded funds (ETFs) and mounting uncertainty surrounding the potential future leadership of the U.S. Federal Reserve.

A cascade of forced liquidations in the derivatives market has accelerated the sell-off. More than $2 billion in positions have been unwound since last Thursday alone, indicating that a significant number of traders were caught offside. In a parallel development, U.S. spot Bitcoin ETFs are experiencing heavy redemptions. The iShares Bitcoin Trust from BlackRock accounted for the bulk of outflows, with nearly $510 million withdrawn last Friday, shaking confidence in what was previously seen as a stabilizing force.

Trading at approximately $78,103, Bitcoin is now approaching its 52-week low of $76,937.06. Analysts note that many ETF investors are currently facing average unrealized losses of around 15%.

Should investors sell immediately? Or is it worth buying Bitcoin?

The Kevin Warsh Factor

A key source of the prevailing market unease is the nomination of Kevin Warsh by U.S. President Donald Trump to chair the Federal Reserve. Warsh, perceived as a monetary policy "hawk," has historically expressed skepticism toward the expansion of the central bank's balance sheet. While he once described Bitcoin as a potential "market disciplinarian," he has also referred to cryptocurrencies as "software pretending to be money." Market observers are concerned that his leadership could lead to increased monetary headwinds for risk assets like cryptocurrencies.

Corporate Holders Feel the Pinch

Even the largest corporate holders are not immune to the correction. Strategy, formerly known as MicroStrategy and the world's largest corporate Bitcoin holder, briefly saw the value of its 713,000+ coin treasury dip below its average acquisition cost of $76,052 per Bitcoin. When the price briefly fell under $75,000 on February 1, the company's paper losses approached $1 billion. Despite the turbulence, the firm maintained its strategy and continued to purchase additional Bitcoin in the week preceding the recent crash.

The path forward is likely to be determined by whether institutional capital returns to ETF products and how future interest rate policy takes shape. Some analysts suggest a technical price floor could form near the $71,000 level, while more pessimistic forecasts warn of a potential further retreat toward $40,000. Critical signals in the coming weeks will emerge from the next FOMC meeting and the progression of Warsh's confirmation process in the U.S. Senate.