Bitcoin once fell below 72,000—how much faith is left in the crypto community?

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Bitcoin has fallen below the $72,000 mark, bringing the market’s “faith” issue to the forefront. Against the backdrop of a sudden drop in global risk appetite, investors are reassessing Bitcoin’s role during market turmoil, and the safe haven narrative for crypto assets is being put to the test.

According to Bloomberg, Bitcoin fell to $71,739 late Wednesday in New York, breaking below $72,000 for the first time in about 15 months. Compared to the peak last October, Bitcoin has retraced more than 42%, with a year-to-date decline of about 17%, dropping to its lowest level since November 6, 2024.

This round of decline is no longer just a continuation of internal deleveraging in the crypto market, but is caused by broader cross-asset pressure. On Wednesday, global markets experienced a synchronized sell-off, with the Nasdaq 100 Index dropping more than 2%. Sectors such as software and chips, which are more sensitive to interest rates, were under pressure, and Bitcoin weakened in tandem.

On the sentiment side, a “crisis of faith” is forming. Shiliang Tang, managing partner at Monarq Asset Management, said the market is experiencing a “crisis of faith.”

Andrew Tu, head of business development at Efficient Frontier, said the crypto market sentiment is at an “extreme fear” level. If $72,000 is lost, Bitcoin may fall to $68,000 and possibly even return to the range before its initial rebound in 2024.

According to Polymarket, there is an 83% chance that Bitcoin will fall to $65,000 this year, while the probability of dropping below $55,000 has climbed to about 59%.

Risk Appetite Suddenly Changes, Bitcoin Seen as "High Volatility Risk Asset"

According to Bloomberg, Wednesday's selling pressure on Bitcoin was related to broader cross-asset tensions, rather than being driven solely by internal crypto asset liquidations. This is significant for investors: when the market enters a synchronized selling phase, Bitcoin does not display resilience independent of risk assets; instead, it behaves more like a high-volatility, long-tail risk asset.

The Nasdaq 100 Index fell more than 2% on the day, dragging down software, chip, and other sectors. Bitcoin broke key round numbers in the same trading session, strengthening the market’s perception of its resonance with risk sentiment.

42% Retracement from Peak, Over $460 Billion Wiped from Crypto Market in a Week

The price decline is quickly being transmitted via shrinking market capitalization. According to CoinGecko data, since the crypto asset peak last October, total market cap has shrunk by about $1.7 trillion. In just the past week, over $460 billion has been lost from the crypto market's capitalization.

As the largest cryptocurrency, Bitcoin’s decline in magnitude and speed has an “anchoring effect” on market sentiment. When Bitcoin’s year-to-date decline expands to around 17%, risk control, margin management, and redemption pressure tend to rise simultaneously, intensifying overall volatility.

How the “Crisis of Faith” Forms: From Forced Liquidation Shocks to Emotional Collapse

Statements from market participants show that sentiment changes are becoming a core variable. The “crisis of faith” described by Shiliang Tang refers to the simultaneous shake-up of investors’ medium- to long-term narratives and short-term pricing mechanisms for crypto assets.

More crucially, the drivers of the decline have shifted. According to Bloomberg, earlier drops were mainly pushed by crypto-asset-specific liquidations, while Wednesday’s pressure came from broader inter-market stress.

This means that even if crypto market leverage has been cleared, as long as external risk assets remain under pressure, Bitcoin may still lack catalysts for an independent rebound.

$72,000 Is a Short-term Line in the Sand; Prediction Markets Bet on $65,000 Within the Year

Several traders see $72,000 as a short-term key level. Andrew Tu points out that if this level cannot hold, Bitcoin is “very likely” to test $68,000, and may even return to the lows seen before the first rebound in 2024.

According to Polymarket, there is an 83% chance that Bitcoin falls to $65,000 this year, and the probability of it dropping below $55,000 has risen to about 59%.

Fund flows also show wavering signals. According to Bloomberg-compiled data, US-listed Bitcoin spot ETFs saw a net inflow of roughly $562 million on Monday, but switched to a net outflow of $272 million on Tuesday, showing that incremental capital is unstable.

With prices falling and capital flows fluctuating, doubts over Bitcoin’s role as a “safe haven asset during stress periods” are rising.

Risk Warning and DisclaimerThe market carries risks, and investment should be approached cautiously. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Investment decisions made based on this content are at your own risk. ```