Bitcoin Drops Sharply After Brief Stability
Bitcoin was trading near $84,000 on Friday before an abrupt sell-off over the weekend pushed prices down to around $77,900 at the time of writing. The move marks a drop of more than 7% in 24 hours, taking the cryptocurrency close to levels last seen around the time Donald Trump was elected president in 2024.
The decline follows weeks of fragile sentiment in digital assets, as investors reassess risk exposure amid shifting expectations on US monetary policy.
From October Peak to Risk-Off Reality
Bitcoin’s recent weakness stands in sharp contrast to its October peak, when prices touched $126,198. Since then, the world’s largest cryptocurrency has struggled to regain momentum.
Investors have steadily pulled back from riskier assets as uncertainty grows around the future path of interest rates set by the Federal Reserve. Higher-for-longer rate expectations tend to reduce appetite for speculative assets, including cryptocurrencies.
Broad Crypto Market Also Under Pressure
The sell-off has not been limited to Bitcoin. The broader cryptocurrency market has also weakened sharply over the past week.
Major tokens such as Ethereum, BNB, XRP, and Solana have each fallen at least 10% over the same period, according to CoinDesk. The synchronized decline points to macro-driven selling rather than token-specific concerns.
Gold Rallies as Bitcoin Falters
As crypto assets declined, traditional safe havens gained ground. Gold surged past a record $5,300 earlier in the week before easing slightly.
According to Bloomberg, gold’s rally coincided with a strengthening US dollar, which posted its largest gain since May. A stronger dollar typically pressures dollar-denominated assets such as Bitcoin.
Kevin Warsh’s Nomination Shifts Rate Expectations
Market focus sharpened after Trump nominated Kevin Warsh to a senior Federal Reserve role. The announcement reshaped expectations around future monetary policy, a key driver of crypto prices.
Warsh is widely viewed as a monetary policy hawk. His public stance emphasises monetary discipline, higher real interest rates, and tighter liquidity conditions.
Why Warsh’s Views Matter for Crypto
According to Markus Thielen, founder of 10x Research, Warsh’s policy framework challenges the narrative that positions Bitcoin as a hedge against currency debasement.
Thielen told CoinDesk that Warsh’s emphasis on reduced liquidity reframes crypto as a speculative asset that tends to weaken when easy money is withdrawn. In such an environment, capital often shifts away from high-volatility assets toward yield-bearing or defensive instruments.
A Contrast With Warsh’s Past Bitcoin Praise
The market reaction appears counterintuitive at first. Warsh has previously spoken positively about Bitcoin, calling it “the new gold” for people under 40 in a 2021 interview.
His view remained consistent in 2025, when he said Bitcoin did not make him nervous and described it as gaining legitimacy as an alternative currency. However, markets are now focusing less on personal views and more on the policy stance his nomination implies.
Higher Rates, Lower Risk Appetite
Trump’s nomination has reinforced expectations that US interest rates may stay higher for longer. When rate expectations rise, investors typically reduce exposure to speculative assets and rotate toward safer investments.
This dynamic helps explain why Bitcoin and other cryptocurrencies weakened even as gold initially rallied. Liquidity conditions, rather than ideological support for crypto, continue to dominate price action.
What Comes Next for Bitcoin
Bitcoin’s near-term direction now hinges on macro signals. Federal Reserve communication, real rate movements, and dollar strength will remain decisive.
While long-term narratives around digital assets persist, the current sell-off underscores a recurring reality. In periods of tightening liquidity and policy discipline, Bitcoin trades less like digital gold and more like a high-beta risk asset.
Source: Forbes
Bitcoin dropped below $78,000 Saturday, the lowest it’s been since 2024.
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