Bitcoin Falls Below $70,000 After Erasing Post-Election Gains During 'Sell at Any Price' Rout

Bitcoin fell below $70,000 on Friday, reaching a low of $63,257, the lowest level since November 2024. The price drop erased gains made after the U.S. presidential election in November 2024. The sell-off was driven by macroeconomic concerns and a broader market rotation away from technology and software stocks.

The crypto market saw over $2.6 billion in liquidations, with long positions accounting for $2.13 billion of the losses. Bitcoin's open interest dropped to $47 billion, the lowest since mid-March 2025. Ethereum also saw significant outflows, with institutional investors withdrawing $81 million from ETFs.

The U.S. government's Bitcoin reserve lost nearly $5 billion in value after the market crash. The reserve, established by President Donald Trump, aimed to position the U.S. as a leader in the crypto space. The U.S. currently holds about 328,000 Bitcoins, valued at $23 billion.

Why Did This Happen?

Bitcoin's recent decline was fueled by growing concerns over AI-related valuations and the sector's long-term sustainability. Analysts noted that Bitcoin has become increasingly correlated with software stocks, particularly the iShares Expanded Tech Software ETF, with a 30-day rolling correlation of 0.73.

This correlation is not coincidental. Bitcoin is viewed by some as an open-source software product, making it vulnerable to the same macroeconomic and technological pressures as traditional software firms.

The broader risk-off sentiment across the market also played a role. The recent sell-off in AI and software stocks led to a flight of capital out of high-risk assets, including Bitcoin.

How Did Markets Respond?

The sell-off had a ripple effect across related markets. Bitcoin mining stocks, including Strategy and Riot Platforms, fell sharply. Strategy's stock dropped 17%, while Riot Platforms fell 13% on the day.

Bitcoin ETFs also experienced significant outflows. Spot Bitcoin ETFs recorded $545 million in outflows on Wednesday. Year-to-date, the funds have seen $5.4 billion in redemptions, despite $3.5 billion in inflows.

The broader crypto market has lost $2 trillion in value since hitting a peak of $4.379 trillion in October 2025. Bitcoin's decline alone accounts for nearly $1 trillion of that loss.

What Are Analysts Watching Next?

Analysts are closely monitoring Bitcoin's support levels and whether the current correction will lead to a deeper bear market. The RSI on the daily chart has risen to 23, suggesting bearish momentum may be easing.

Key technical levels to watch include the $70,000 supply zone and the $60,000 support level. A break below $60,000 would confirm a more aggressive bearish trend.

Investor behavior is also under scrutiny. Despite the losses, most ETF investors continue to hold their positions. Bloomberg's Eric Balchunas estimates that only about 6% of assets have exited ETFs.

BlackRock's iShares Bitcoin ETF, which briefly hit $100 billion in assets, has fallen to around $60 billion. However, analysts suggest the fund's growth remains impressive even after the recent correction.

The broader market outlook remains cautious. With Bitcoin down nearly 17% for the week, some analysts are warning of a potential months-long correction.

The Federal Reserve's potential move to shrink its balance sheet, as suggested by Trump's nominee for Fed chair, Kevin Warsh, could also impact Bitcoin's price. A smaller balance sheet could reduce liquidity support for speculative assets like crypto.