Bitcoin prices fell below $60,000 this week, hitting their lowest level since October 2024, as traders abandoned expectations for rate cuts and the Federal Reserve began preparing to raise borrowing costs later this year.
According to crypto slate According to the data, the largest digital asset fell more than 4% in the past 24 hours, falling to $59,030, but recovered to around $61,650 at press time. The move widened the decline, wiping out more than 50% of its value since hitting a record in October last year.
Bitcoin’s woes quickly rippled through the broader digital asset ecosystem. Ethereum, the second-largest cryptocurrency by market capitalization, fell about 3% to trade around $1,650.
Alternative cryptocurrencies experienced similar declines. Major digital assets such as Solana, BNB, Cardano, XRP, Dogecoin, and HyperLiquid all traded solidly in negative territory as risk-off sentiment permeated all layers of the cryptocurrency market.
Cascading liquidation events
The rapid and widespread market decline caused a sharp unwinding of leveraged positions across crypto derivatives exchanges. Algorithmic selling and margin calls further exacerbated the downward momentum as the asset tore through a key technical boundary.
Market data tracking firm Coinglass reported that about $1 billion in derivatives contracts were terminated within 24 hours. The sweep affected more than 176,000 retail market participants.
This drawdown disproportionately affected traders hoping for a rebound. Liquidations of long-term contracts that bet on rising prices accounted for approximately $781 million of the total, while short-term liquidations amounted to $211 million.
This severe imbalance reflects that speculators were bullish on a structural decline and the market was fundamentally misplaced.
Bitcoin-specific contracts took the brunt of the washout, suffering a $417 million forced shutdown. The most severe liquidation occurred on the Binance exchange and involved $12 million in Bitcoin swap contracts.
Meanwhile, ETH-related derivatives traders absorbed about $230 million of the total liquidation eliminations.
Spot selling and ETF redemptions drive breakout
Trading data shows the decline began in the spot market, where investors buy and sell the underlying assets, rather than in the futures market.
According to CryptoQuant data, more than $470 million worth of Bitcoin sell orders were executed on Binance within a minute when the price fell below $60,000. Within the next hour, the exchange’s sell orders exceeded $1.2 billion.
The order volume was concentrated around $60,000, indicating that many investors chose that level as an exit. Once these orders entered the market, the available demand proved insufficient to absorb the supply without a sharp drop in price.
Broad-based demand also remains weak. Glassnode said realized losses, spot Bitcoin exchange-traded fund withdrawals, and increased demand for defensive options continue to weigh on prices.
Some investors are buying at the lows, but the accumulation is not strong enough to support a sustained recovery.
ETF redemptions are adding to the pressure. The 13 spot Bitcoin funds in the US are nearing their seventh consecutive week of net outflows, with investors withdrawing more than $6 billion during the period, according to SoSoValue data.
US macroeconomy accelerates Bitcoin decline
The main driver of the current decline appears to be rooted in expectations for U.S. monetary policy.
Earlier this year, market participants were aggressively pricing in multiple rate cuts heading into 2026, but those expectations have now evaporated.
Rather, resilient inflation statistics and the economic fallout from the Iran conflict are prompting a major overhaul of Federal Reserve policy.
With the resumption of shipping through the Strait of Hormuz easing some of the near-term geopolitical uncertainty, the focus has shifted entirely to the strength of the U.S. economy and the central bank’s responsibility to keep prices in check.
In response, the US dollar index (DXY) also soared, breaking the 100 milestone and hitting a 13-month high of 101.5. A strong dollar has historically put pressure on Bitcoin and other risk assets, as high-yielding fiat currencies make non-yielding digital alternatives less attractive.
CryptoQuant analyst Axel Adler pointed out that the market no longer wants a turnaround. Adler said traders are pricing in a scenario in which the Federal Reserve is likely to raise interest rates by October, which would lead to further liquidity constraints.
Historically, this has been a difficult environment for highly speculative assets.
The bond market reaction further confirms this change in expectations. As government bond yields inch higher, the opportunity cost of holding non-yielding assets like Bitcoin has risen significantly. Tighter financial conditions typically remove the excess liquidity that fuels speculation in the crypto sector.
For an asset class that thrives on abundant capital and a zero-interest rate environment, the prospect of rate hikes by the fourth quarter poses a formidable structural headwind.
Bitcoin is still waiting for the market to calm down
Despite the drawdown and current market conditions, some crypto analysts argue that the bottom may not be established yet.
James Lavish, co-managing partner of the Bitcoin Opportunity Fund, expressed concern about the nature of the current decline.
Lavish noted that true market bottoms are usually accompanied by massive volume spikes that indicate complete panic and capitulation. He suggested that the current price movement resembles a buyer’s strike more than an eventual flashout, pointing to deep-seated negative sentiment that could ultimately force an even deeper collapse.
Nevertheless, Lavish argued that if the basic architecture of the Bitcoin network remains intact and central banks eventually return to devaluing currencies, the long-term risk-to-reward ratio remains very attractive even at these depressed levels.
But for now, digital asset investors face tough waiting times. Bitcoin’s path back to its previous highs is likely to become increasingly difficult as the Federal Reserve considers further monetary tightening and institutional capital continues to retreat.
(Tag translation) Bitcoin
