Bitcoin slipped sharply in Sunday morning trading to below $80,000, its lowest level since April 2025. The decline was led by factors including thin liquidity, limited buying interest, geopolitical instability and a leadership change at the US Federal Reserve.
The world’s largest cryptocurrency was trading more than 6 per cent lower to 78,706.59 at 9.17am UAE time, heading to record its fourth monthly drop in a row.
The latest fall intensifies a drawdown that has erased more than 30 per cent from the token since October. It plunged to $75,000 in April during US President Donald Trump’s “liberation day” tariff scare, surged to nearly $125,000 in October, then faded as AI valuation fears returned.
On Friday, Bitcoin fell to as low as $81,104, the lowest since November 21, after former Federal Reserve governor Kevin Warsh was nominated as the next Fed chair. The expectations are that Mr Warsh might tighten up the monetary policy for longer, worrying some traders and investors, as such a move would typically reduce liquidity for assets like crypto.
Heightened tensions in the Middle East surrounding the US and Iran also led to deteriorated risk sentiment, specifically, following reports of an explosion at Iran’s Bandar Abbas port, which is a shipping hub on the Strait of Hormuz, handling about a fifth of the world’s seaborne oil. The move has triggered a risk-off sentiment, pushing investors towards traditional safe havens like gold and silver.
“Bitcoin is behaving less like a political trade and more like a high-liquidity risk asset, responding primarily to dollar liquidity, interest-rate expectations and broader risk sentiment,” said Sam North, market analyst at eToro.
“With gold absorbing much of the safe-haven demand and equities continuing to attract growth capital, there has been little urgency to rotate meaningfully into Bitcoin, even against a friendlier regulatory backdrop. Gold and silver have delivered stellar performance over the past 12 months, attracting strong investor flows and generating ‘Bitcoin-like’ returns that have left Bitcoin trailing.”
Some market analysts said Bitcoin could move back towards its highs this year, thanks to a weaker US dollar and persistent exchange-traded fund inflows.
“While the extreme gains of Bitcoin’s early years are unlikely to be repeated, the asset is still positioned to outperform traditional indices as it captures a growing share of capital historically allocated to gold and other stores of value,” Mohanad Yakout, senior market analyst at broker Scope Market, said in December.
Continued institutional adoption, regulatory stability and a manageable correlation with technology equities could lead to Bitcoin trading in an estimated range between $140,000 and $160,000, he had forecast at the time.
In a more bullish scenario, prices could rise as high as $150,000, Carsten Menke, head of next-generation research at Swiss private bank Julius Baer, predicts.
“Bitcoin typically does well in times of ample liquidity,” he said in December.
Bitcoin’s long-term case remains intact, supported by structural demand and institutional participation, said Mr North. “But in the current environment, price action is being driven by liquidity and risk appetite, not politics. Any benefits from a more crypto-friendly stance are likely to materialise gradually over time rather than as an immediate boost to prices.”
