Bitcoin Crash to $60,000: When Panic Rules Markets and Fundamentals No Longer Matter

When Fundamentals Give Way to Panic: Bitcoin in Free Fall

The Bitcoin price reached a level in the early hours of Friday that made even experienced market participants take notice. With a drop to as low as $60,001 on Coinbase ^[1], Bitcoin not only marked its lowest level since October 2024 but also completed a halving from its all-time high in October 2025 of approximately $126,300 ^[1]. Particularly notable: Thursday's trading day with a loss of 13.98 percent was the worst since the FTX collapse in November 2022 ^[1]. What makes this development so revealing is less the crash itself—Bitcoin veterans are familiar with such volatility—but rather the complete divergence between fundamental valuation and market sentiment. This shows in pure form how modern markets function in extreme situations: forced liquidations, momentum trading, and panic selling override any rational valuation.

The Facts

The bare numbers paint a dramatic picture of recent market developments. Bitcoin lost more than 35 percent of its value within just three weeks ^[1], thereby giving back all price gains since Donald Trump's election victory on November 5, 2024, when Bitcoin was still trading at around $70,000 ^[1]. The drop below the previous all-time high of $69,000 from November 2021 initiated an acceleration of the downward movement ^[1].

The derivatives markets were hit by veritable liquidation cascades. In the 24 hours leading up to Friday morning alone, positions totaling $2.6 to $2.7 billion were forcibly liquidated, with 85 percent of these being leveraged long positions ^[2][3]. Over 588,000 traders were affected by these liquidations ^[3]. The previous Saturday, forced liquidations were even more extensive at over $2.4 billion ^[1]. These forced sales significantly intensified the downward movement and demonstrate the dangers of speculative leveraged trading in volatile markets.

The selling pressure also manifested itself in the wallet movements of large investors. Data from Cryptoquant shows that the largest exchange, Binance, recorded inflows of around 78,500 BTC, of which almost half (48.5 percent) came from so-called whales—the highest level since the crisis year of 2022 ^[2]. These transfers to exchanges are typically interpreted as preparation for selling.

Market sentiment reached extreme lows. The Crypto Fear & Greed Index fell to a value of 9 out of 100 points, marking "extreme fear"—the lowest level since June 2022, when the market was suffering from the Terra collapse ^[3]. Bitcoin traded below the 200-week exponential moving average for the first time since the peak of the bear market, an important long-term trend indicator ^[3].

The impact on prominent Bitcoin treasury companies was severe. Strategy, the largest Bitcoin-holding company with 713,502 BTC on its balance sheet, reported an investment loss of $17.4 billion for Q4 2025 after hours and slipped significantly underwater for the first time since October 2023 ^[1]. At times, the company was sitting on unrealized losses of up to $11 billion when Bitcoin tested the $60,000 mark ^[2]. Michael Saylor nevertheless remained composed, telling Fox Business: "As long as Bitcoin rises by 1.25 percent each year, Strategy can pay its dividends forever" ^[2]. Bitmine and its Ethereum position were hit even harder: despite additional purchases of almost 42,000 ETH, the company lost over $8 billion, more than 50 percent of the total value ^[2].

Analysis & Context

The current situation reveals a fundamental market dynamic: Bitcoin is not reacting to specific negative news in this phase but is falling because it is falling. There are no Bitcoin-specific events that would justify the crash ^[1]. Instead, we are observing a classic momentum phenomenon in which technical factors and market mechanics dominate price formation. The nomination of Kevin Warsh as Fed successor to Jerome Powell—a known hawk on monetary policy matters—triggered initial nervousness but cannot fully explain the crash, as this information had been known for over a week ^[1].

Interesting is the changed correlation to traditional asset classes. Bitcoin is increasingly developing into a "risk-on asset" that is disproportionately sold off during phases of general market nervousness ^[1]. At the same time, the Nasdaq 100 as well as gold and silver also fell ^[1], indicating a broader flight to cash. Jeff Ko of CoinEx Research emphasizes that Bitcoin is not fulfilling its hoped-for function as a safe haven compared to gold, while US technology stocks are simultaneously under valuation pressure ^[3]. The weakness in the tech sector, exemplified by Amazon's disappointing earnings forecast and the announcement of $200 billion in investments in AI projects, reinforces investors' risk-averse stance ^[2].

From a historical perspective, the current situation certainly offers parallels to earlier cycles. At the end of 2022, when Bitcoin also fell below the previous cycle high and panic prevailed, this proved to be an extraordinary buying opportunity. Those who entered at $15,500 at that time would have recorded a 700 percent gain three years later and would still be up about 300 percent despite the current correction ^[1]. However, in past cycles, Bitcoin typically formed its bottom about a year after the temporary peak, which could mean that further weak months lie ahead ^[1]. On the other hand, it is conceivable that the market has already anticipated and front-run this pattern.

The fundamental properties of Bitcoin—limited total supply, decentralization, absence of counterparty risks—have not changed ^[1]. Especially in times of geopolitical tensions, such as the current escalation between the US and Iran with warnings to US citizens to leave the country ^[2], these properties should theoretically gain value. The fact that the market is currently reacting differently shows the discrepancy between theoretical value proposition and practical market behavior in stress phases.

Conclusion

• The Bitcoin crash to $60,000 is primarily driven by technical factors—liquidation cascades exceeding $2.6 billion, momentum selling, and extreme fear in the market—not by fundamental deterioration of the Bitcoin network itself

• The historical perspective calls for differentiation: While past bear markets required about a year to form a bottom, Bitcoin's history also shows that patient investors who weathered weak phases or bought more were rewarded in the long term

• Bitcoin is increasingly developing into a highly correlated risk asset that has not yet fulfilled its theoretical role as a safe haven during crisis phases—an important insight for asset allocation

• The drastic losses of treasury companies like Strategy demonstrate the volatility risks of concentrated Bitcoin positions, even though their long-term strategy remains unchanged

• In such extreme phases, a systematic dollar-cost averaging approach can be rational: it enables participation in a possible recovery while simultaneously allowing additional purchases during further declines—without having to make timing-dependent all-or-nothing decisions