Bitcoin has plunged to its lowest price level since before the November 2024 election, falling below $75,000 on Monday as cryptocurrency markets face mounting pressure. The digital asset has entered bear market territory, declining as much as 37% from its October peak before recovering slightly to trade around $78,500.
The bitcoin price decline comes amid a broader retreat from speculative momentum trades that has rippled across financial markets. According to data from Coinglass, January 30 marked the 10th largest liquidation event in the cryptocurrency’s history, with $2.5 billion in positions forcibly sold as traders faced margin calls.
Gold and Silver Crash Triggers Bitcoin Selloff
The immediate catalyst for the latest bitcoin drop appears to be a dramatic breakdown in precious metals prices. Gold and silver, which had been behaving more like momentum stocks than traditional safe-haven assets in recent weeks, experienced a brutal sell-off on Friday that quickly spread to cryptocurrency markets.
According to Kyle Rodda, a senior financial market analyst at Capital.com, the interconnection between these markets created a domino effect. The substantial build-up of leveraged positions in precious metals forced traders to liquidate other holdings, including bitcoin, to cover losses when metals prices collapsed.
Regulatory Hopes Fade as Market Realities Set In
Meanwhile, the initial enthusiasm surrounding President Trump’s pro-cryptocurrency campaign promises has significantly cooled. During the 2024 campaign, Trump pledged to make the United States the “crypto capital of the world” and proposed creating a strategic bitcoin reserve alongside crypto-friendly regulation.
However, investors appear to have fully priced in these potential regulatory benefits while focusing on more immediate bearish factors. Trade war uncertainties, a sluggish labor market, and concerns about government shutdowns have driven investors away from riskier assets across the board.
Fed Leadership Change Weighs on Bitcoin Price Outlook
Additionally, Trump’s recent appointment of Kevin Warsh to lead the Federal Reserve has intensified concerns about future monetary policy. While Warsh has advocated for lower interest rates since Trump’s election victory, his historical track record suggests a more hawkish approach to monetary policy.
Bitcoin and other risk assets, including growth stocks, typically perform best in low-rate, easy-money environments. The prospect of tighter monetary policy under Warsh’s leadership has therefore contributed to downward pressure on cryptocurrency prices.
Rodda characterized Warsh’s nomination as the pin that popped an overinflated bubble. The analyst noted that every speculative bubble requires a catalyst to trigger its collapse, and this appointment provided exactly that trigger for overleveraged precious metals and bitcoin positions.
Market Deleveraging Continues
In contrast to the euphoric trading conditions that prevailed in late 2024, current market dynamics reflect a significant deleveraging process. Traders who had built up substantial leveraged positions during the rally are now being forced to reduce risk exposure across multiple asset classes.
The report indicates that this forced selling creates a self-reinforcing cycle where declining prices trigger additional liquidations. This pattern was evident in the October 2025 liquidation event, which Coinglass data shows was the largest in bitcoin’s history at $19.1 billion in positions sold.
Market observers note that bitcoin’s tendency to track other risk assets has become particularly pronounced during this downturn. Secondary effects from precious metals deleveraging and broader risk-off sentiment have compounded the cryptocurrency’s challenges beyond any crypto-specific factors.
The trajectory of bitcoin price recovery remains uncertain and will likely depend on stabilization in precious metals markets and clarity regarding Federal Reserve policy direction under the incoming leadership. Investors are closely monitoring whether current price levels represent a temporary bottom or the beginning of an extended consolidation period.
