Bitcoin Plummets 40%: Trading Near $63,000 After Crashing From $126,000 Peak
Bitcoin's brutal correction slashes nearly forty percent from its all-time high.
The Great Unwind
The flagship cryptocurrency isn't just dipping—it's in a full-scale retreat. After touching dizzying heights, the market's gravity reasserts itself with a vengeance. This isn't a blip; it's a fundamental recalibration that's shaking out over-leveraged positions and testing the conviction of every holder.
Anatomy of a Drawdown
Such a steep decline doesn't happen in a vacuum. It typically follows a period of unsustainable euphoria, where price detaches from on-chain utility and broader macroeconomic realities. Liquidity tightens, leverage unwinds, and the narrative shifts from 'number go up' to survival mode. It's the part of the cycle traditional finance loves to point at with a smug, 'I told you so'—usually while ignoring their own banks' quarterly bailouts.
The Road Ahead
History suggests this is where real builders keep building. The noise fades, and focus returns to protocol development, adoption metrics, and infrastructure. For Bitcoin, its core value proposition remains untouchable by price swings. This volatility isn't a bug; it's the market's violent process of discovering a long-term price for a radically new asset class. Buckle up.
Key chart levels continue to fail
Matt Maley, chief market strategist at Miller Tabak + Co., is watching retracement levels closely. He said the zone just below $70,000 matters because it lines up with the 50% retracement of the rally that started after the 2022 lows. Below that, his next focus is $65,000, tied to the 50% retracement from the pandemic low set in 2020.
Alex Thorn, head of firmwide research at Galaxy Digital, tracks long moving averages. In the last three bull markets, Bitcoin found support at the 50-week moving average. Once that line failed, price slid back to the 200-week moving average. Right now, the token trades below the 50-week line, and the 200-week average sits near $58,000.
Alex also wrote that outside of 2017, a 40% drop from a record high never stopped there. In each case, losses stretched to 50% or more within three months.
Valuation pressure and betting markets show fear
Old valuation arguments are also losing grip. JPMorgan strategists say Bitcoin now trades well below its estimated production cost of about $87,000. If price stays under that level for a long stretch, unprofitable miners could exit, which would impact production economics even more.
That backdrop is not pulling buyers back. Trading behavior looks more like a tech risk dump than a bargain hunt.
On Polymarket, odds for a finish below $55,000 climbed to roughly 60%. Odds for a rebound to $100,000 fell to 54%, down from 80% at the start of the year. Short-dated bets lean even darker. One February market now prices a 72% chance that Bitcoin trades below $70,000 by March 1. That jump ROSE more than 35 percentage points this month, backed by about $1.7 million in bets.
ETF flows no longer help. Tens of billions flowed into funds last year and lifted prices. That support faded. U.S.-listed crypto ETFs saw nearly $4 billion in outflows over the past three months, based on Bloomberg data. Research from Glassnode and K33 shows the average trader now sits underwater.
This clashes with bullish calls still floating around Wall Street. Tom Lee predicted in November that Bitcoin could reach $150,000 to $200,000, which did not happen. Even after cutting targets, firms like Standard Chartered and Bernstein still see $150,000 by year end. The charts and the bets say the fight is far from over.
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