Bitcoin falls sharply on Thursday, sliding as much as 8.3% to $66,596, as its post-election rally erased all gains made since the election of President Donald Trump. The move marked the cryptocurrency’s lowest level since October 2024 and signaled a decisive reversal from last year’s surge.
The slide began in mid-January amid rising geopolitical tensions that unsettled global markets and dampened risk appetite. As volatility increased, leveraged positions were unwound, accelerating the selloff.
The decline has weighed on the broader digital asset market, including exchange-traded funds and companies such as Strategy Inc., which holds sizable Bitcoin reserves.
ETF outflows accelerate as market sentiment shifts
U.S. spot Bitcoin ETFs had provided support for much of 2025 as tens of billions of dollars flowed into the products. That support has faded. Bloomberg data shows roughly $2 billion has been withdrawn from Bitcoin ETFs over the past month, with total outflows exceeding $5 billion over the last three months.
BREAKING: Bitcoin has crashed below $70k, as predicted by Polymarket. pic.twitter.com/fsJap1DFi7
— Polymarket (@Polymarket) February 5, 2026
Augustine Fan, a partner at Hong Kong-based crypto options platform SignalPlus, said sentiment has continued to deteriorate. He pointed to growing uncertainty over how digital assets fit into a financial system increasingly shaped by traditional institutions.
Bitcoin falls deepen as post-election gains unwind
Market stress is also visible in trading behavior. Chris Newhouse of Ergonia said repeated ETF redemptions and forced liquidations are intensifying selling pressure. Without buyers willing to step in, he noted, each downturn reinforces defensive positioning and keeps demand on the sidelines.
Losses have spread across the crypto sector. The MarketVector Digital Assets 100 Small-Cap Index, which tracks the 50 smallest tokens within a broader group of 100, has fallen about 70 percent over the past year. Smaller and less liquid assets have posted steeper declines.
Crypto firms cut jobs, traders brace for more volatility
Crypto-related companies are also under strain. Shares of Coinbase Global Inc. have dropped more than 30 percent this year. Gemini Space Station Inc. has said it plans to cut up to 25 percent of its workforce and wind down operations in the UK, the European Union, and Australia.
In the options market, traders are positioning for further downside. Data from Deribit shows heavy interest in contracts expiring in June, with strike prices clustered around $60,000 and $20,000.
Ilan Solot, senior global markets strategist at Marex, said the selloff reflects a mix of pressures, including weakness in technology stocks, gold’s strength, and uncertainty around how cryptocurrencies should be valued. While the near-term outlook remains cautious, he said similar downturns have historically drawn long-term investors.
