As the largest cryptocurrency in the world continued to decline, Bitcoin was on the verge of falling below the crucial US$70,000 (HK$546,875) barrier on Thursday.
Bitcoin Slides Toward Key Support Level
In the Asian session, Bitcoin fell more than 3% to US$70,052.38, the lowest since November 2024.
The second-biggest cryptocurrency in the world, ether, was likewise down about 2% at US$2,086.11. For the first time since May of last year, the price would fall below US$2,000.
Market Reaction Across Major Cryptocurrencies
Analysts claim that Kevin Warsh’s nomination as the next Federal Reserve Chair, which raised concerns that he may reduce the Fed’s balance sheet, was the catalyst for the most recent crash in cryptocurrencies.
While ether is down about 30 percent this year, Bitcoin has already dropped more than 7 percent for the week, bringing its losses for the year to almost 20 percent.
Federal Reserve Policy Concerns Weigh on Crypto
Since cryptocurrencies have tended to rise when the Fed lubricated the money markets with liquidity—a stimulus for speculative assets—they have been commonly considered benefactors of a large balance sheet.
According to Manuel Villegas Franceschi of Julius Baer’s next generation research team, “the market fears a hawk with him.” “Crypto will not benefit from a reduced balance sheet.”
📉 Bitcoin Market Snapshot
- Current Price: US$70,052.38
- Key Support Level: US$70,000
- Weekly Decline: Over 7%
- YTD Loss: Nearly 20%
- Market Session: Asian trading hours
Investor Sentiment Remains Fragile
Indeed, after a record meltdown in October of last year caused bitcoin to plummet from its peak due to the washing out of leveraged bets, cryptocurrencies have been struggling for months. As a result, investors are becoming less interested in digital assets, and their perception of the sector is shaky.
“We think that large withdrawals from institutional ETFs are the primary cause of this wider fall. Since the October 2025 decline, billions of dollars have left these funds per month, according to a message to customers from Deutsche Bank analysts.
ETF Outflows Intensify Selling Pressure
They said that after withdrawals of over US$2 billion and US$7 billion in December and November, respectively, US spot bitcoin ETFs had outflows of almost US$3 billion in January.
“In our opinion, this consistent selling indicates that traditional investors are becoming disinterested and that general skepticism over cryptocurrency is increasing,” the analysts stated.
⚠️ Institutional ETF Outflows
- January Outflows: Nearly US$3 billion
- December Outflows: About US$2 billion
- November Outflows: Around US$7 billion
- Trend: Sustained institutional selling
- Impact: Weakening investor confidence
Frequently Asked Questions
1. What is causing Bitcoin to decline towards the US$70,000 mark?
The primary cause of the pressure on Bitcoin is concerns about tighter monetary policy in the US. Expectations of a lower Fed balance sheet, which usually harms riskier assets like cryptocurrencies, have increased with Kevin Warsh’s nomination as the next Federal Reserve Chair.
2. How important is the Bitcoin price at US$70,000?
A crucial level of technical and psychological support is $70,000 USD. Further selling and increased volatility in the cryptocurrency market could result from a clear break below it.
3. Why do Federal Reserve policies affect cryptocurrencies?
When liquidity is plentiful, cryptocurrencies typically do well. Liquidity dries up when the Fed tightens policy or shrinks its balance sheet, which lowers investor demand for speculative assets like Bitcoin and Ether.
4. How do ETFs contribute to the recent decline in cryptocurrency?
Billions of funds have been taken out of institutional ETFs in recent months. This persistent selling pressure points to a decline in traditional investors’ confidence.
5. Do Ether and Bitcoin face comparable risks?
Yes. Ether has also experienced a significant decrease and is already nearing $2,000 USD. It would be the weakest decline since May of last year if it fell below this level, indicating widespread weakness in the cryptocurrency market.
Conclusion
As macroeconomic assumptions change, Bitcoin’s decline approaching the US$70,000 barrier underscores the growing concern in the cryptocurrency market. Digital assets are under pressure due to worries about tighter US monetary policy, ongoing ETF withdrawals, and weak investor mood.
Even while cryptocurrencies are still prone to volatility, if confidence and liquidity do not improve, the loss of important support levels could soon increase losses. Instead of a quick rebound, the market seems to be hoping for further volatility in the near future.
Disclaimer
This article is for informational purposes only and does not constitute financial or investment advice.
