World's largest cryptocurrency Bitcoin extended losses on Friday, falling over 6 per cent to about $66,198 as risk aversion, heavy liquidations, weakness in technology stocks, and fears of tighter US monetary policy rattled investors.
Bitcoin saw its sharpest single‑day decline since late 2024 on Thursday when it slid 12.6 per cent to roughly $63,300, its lowest level since October 2024, wiping out billions of asset value in dollar terms, multiple reports said.
Analysts said global investors pulling back from risky assets caused a drop in crypto assets, with volatility spilling into the segment from precious metals and tech stocks.
Crypto market data analytics platforms showed that nearly $1 billion of bitcoin positions were liquidated in 24 hours as leveraged traders were forced out, which caused a domino effect across crypto markets. Bitcoin has fallen 20.22 per cent this week, 28.86 per cent in a month, and 32.85 per cent in a year.
Ether, the second‑largest token, dropped over 13 per cent in a day and has lost nearly 38 per cent in 2026 to date.
Market watchers said previous cycles like this indicated that cryptocurrency has gone into a reset mode that could take months rather than a short-term correction.
Crypto market enthusiasm fell after US President Donald Trump nominated Kevin Warsh as his choice for Federal Reserve chair, as investors felt a more hawkish Fed under Warsh would shrink the central bank balance sheet, removing liquidity that has supported risk assets, they said.
Longer‑term pressure on crypto assets came from institutional exits as sustained withdrawals from institutional exchange‑traded funds, such as outflows of over $3 billion in January from US spot bitcoin ETFs.
Bitcoin's price has been in line with technology stocks, and the sustained sharp sell‑off in software and AI‑linked equities amplified losses as investors cut exposure, analysts said.
Market watchers also warned of forced liquidation among crypto miners if prices continue to fall, as they enter cash flow stress, reports said.
In 2025, the United States announced the creation of a Strategic Bitcoin Reserve, a move that highlighted Bitcoin's growing importance at a national and strategic level.
This step was widely seen as a signal of increasing acceptance of digital assets within traditional financial systems.
(With inputs from IANS)
