Bitcoin Drops Below $60K as Institutions Sell

Bitcoin is experiencing its worst losing streak since 2017. Seven consecutive days in the red. It’s painful.

The leading cryptocurrency has lost 10% this week and is now at $59,500. Major holders are starting to offload their positions. MicroStrategy remains committed, but other institutions are selling. Trading volumes on Kraken fell by 15% on February 7. Not a good sign. Asian traders saw Bitcoin dip to nearly $58,000 before a slight rebound. But the mood remains tense.

Changpeng Zhao of Binance says it’s normal.

“The market is going through a natural correction,” said the Binance CEO during a conference in Hong Kong. He believes these adjustments are necessary for the market’s health. Perhaps. But investors don’t like seeing their portfolios shrink. Overall trading volume is declining everywhere. Coinbase is set to release its results on February 15. It’s probably not going to be pretty.

Speculators are turning to Ethereum. ETH is up 2% this week. Not a huge gain, but better than Bitcoin. Vitalik Buterin remains optimistic about his platform. He believes Ethereum will weather the turbulence better.

Grayscale Bitcoin Trust is also losing value.

The fund saw its net asset value drop on February 6. The managers have yet to comment. Radio silence. Meanwhile, Jack Dorsey continues to defend Bitcoin. “Decentralization and transparency are crucial,” said the former Twitter CEO in a recent interview. He maintains that Bitcoin represents the future. Even if the future currently looks more like a descent into hell. See also: Bitcoin Struggles Below K as Bears.

Glassnode data shows something interesting. The number of bitcoins in long-term wallets is at a record high. This means some hodlers are keeping their coins despite the drop. They still believe in the project. Or they’re afraid to sell at a loss. Hard to say.

Square is exploring new blockchain integrations according to an announcement on February 11. This gave Bitcoin a small boost. Very small. The downward trend remains dominant. Sell orders are piling up on Bitstamp.

Cathie Wood of Ark Invest keeps the faith. “Bitcoin’s disruptive potential remains intact despite the volatility,” she says. Her fund still holds a significant amount of crypto. She’s betting on the long term. But in the short term, it’s a struggle.

The SEC remains silent on regulation. No new rules announced. Investors are waiting for clarifications. Uncertainty weighs on prices. A regulators’ meeting is scheduled in a few weeks. It could change things. Or not.

In 2018 and 2022, similar declines preceded long bear markets. Industry veterans remember. They fear history might repeat itself. New investors are discovering crypto volatility. Not always easy to stomach. More on this topic: Bitcoin Plunges Below K as Perpetual.

Exchange platforms are seeing their revenues fall. Less volume equals fewer commissions. Binance, Coinbase, Kraken… all in the same boat. They hope the storm will pass quickly.

Some analysts talk of capitulation. Others see a buying opportunity. The market remains divided on the direction to take. Bitcoin continues to fluctuate between $58,000 and $61,000. No one really knows where it will stop. The coming days will be crucial in determining whether this is a simple correction or the start of a real bear market.

Bitcoin miners are also feeling the pressure. Riot Blockchain and Marathon Digital saw their shares drop by 18% and 22% respectively this week. The global hashrate remains stable at 580 EH/s, but several mining farms are scaling back operations. Core Scientific, just out of bankruptcy, is temporarily halting the expansion of its Texas facilities. Mining profitability erodes when prices fall. Especially with energy costs remaining high in some regions.

The impact is also felt among crypto startups. Fundraising fell by 67% in January compared to December, according to PitchBook. Andreessen Horowitz is slowing its investments in the blockchain ecosystem. Even Paradigm, one of the most active funds, is becoming more selective. Crypto entrepreneurs are struggling to convince investors. Many are postponing funding rounds in hopes of better days. The ecosystem is contracting beyond just the price of Bitcoin.