Bitcoin has clawed its way back above the $65,000 mark, offering a brief sense of relief after a punishing selloff that has put the cryptocurrency on track for its steepest weekly decline since late 2022. The rebound comes amid signs that a broader rout in global technology stocks may be stabilizing, easing pressure on risk assets that had been aggressively sold across markets.
Despite the bounce, the damage has already been done. Bitcoin is still down nearly 14% on the week, reflecting how quickly sentiment has shifted after months of fragility in digital asset markets. Prices earlier dipped close to $60,000, a level that rattled traders who had grown accustomed to sharp rallies fueled by optimism around artificial intelligence, crypto-friendly political rhetoric, and expanding institutional participation.
The current downturn highlights how closely bitcoin has become linked to the wider tech and macro trade. As leveraged positions in equities, precious metals, and cryptocurrencies were unwound, bitcoin was swept up in the selloff. What was once marketed as a hedge against traditional markets is again behaving like a high-beta risk asset, moving in step with broader shifts in investor appetite for risk.
Ethereum has followed a similar path. While ether has rebounded toward $1,900, it remains deep in the red for the week and significantly lower year-to-date. The weakness across major tokens underscores the broader cooling of enthusiasm toward crypto after last year’s explosive rally ended abruptly.
Since peaking in early October, the total crypto market has shed roughly $2 trillion in value, according to industry data. More than half of that decline has occurred in just the past month, as investors reassess assumptions that prices would continue climbing without interruption. Analysts point to excessive leverage and crowded positioning as key contributors to the speed and severity of the pullback.
Another headwind has come from U.S. spot bitcoin exchange-traded funds, which have seen sustained outflows in recent months. Billions of dollars have exited these products since November, signaling that institutional investors are reducing exposure rather than stepping in to buy the dip. That shift has removed a major source of support that previously helped absorb selling pressure.
Still, some market participants caution against interpreting the move toward $60,000 as a sign that crypto’s long-term story is broken. Instead, they argue the pullback reflects a normalization process after speculative narratives ran ahead of fundamentals. In this view, the current volatility is forcing traders to confront real risk management rather than relying on momentum alone.
Whether bitcoin’s recovery above $65,000 marks the beginning of a more durable rebound remains uncertain. Much will depend on broader market conditions, particularly the trajectory of equities and interest rates. For now, bitcoin’s price action serves as a reminder that even the most popular digital assets are not immune to sharp corrections—and that conviction is tested most when volatility returns.
