Falling below $80,000, Bitcoin faces a new round of "trust crisis."

Bitcoin fell below the $80,000 mark and once dipped under $76,000, a retracement of about 40% from its 2025 high. Market worries are shifting from price correction to a loss of confidence.

The latest round of declines occurred during the weekend’s thin liquidity trading session. Bitcoin fell below $76,000 and then weakly oscillated between $77,000 and $79,000, revisiting price regions seen after the previous "Liberation Day" tariff shock.

What’s more unsettling for the market is that this pullback lacks a clear trigger. The market hasn’t witnessed cascading liquidations or systemic shocks; the selling pressure seems shaped by a lack of buyers, dwindling momentum, and weakening conviction, making the downward trend more persistent.

Meanwhile, Bitcoin has reacted sluggishly to common drivers like geopolitical tensions, dollar weakness, and risk asset rebounds. Funds did not visibly rotate into crypto assets during the recent intense gold and silver volatility, reinforcing the narrative of its temporary “decoupling” and diminishing marginal influence.

Longest losing streak since 2018

Bitcoin dropped below $76,000 over the weekend. The sharp fall since October has turned into persistent selling. This time, it's not driven by panic, but by a lack of buyers, momentum, and conviction.

The nearly 11% decline in January marks Bitcoin’s fourth straight monthly decrease, the longest losing streak since 2018.

Unlike October’s correction, this round of declines lacks an obvious catalyst, chain liquidation, or systemic shock. Bitcoin has visibly decoupled from other major financial markets, with demand fading and liquidity dwindling.

More notably, social media shows a relative lack of optimism, and Bitcoin's drop has sparked almost no buying-the-dip enthusiasm.

Market depth shrinks over 30%, liquidity under strain

According to Kaiko data, Bitcoin’s market depth has dropped more than 30% from its October peak. The last time liquidity fell this low was after the FTX collapse in 2022.

"From the peak in 2017 to the bear market in 2018-2019, we saw spot exchange volumes drop 60% to 70%," said Kaiko analyst Laurens Fraussen. By comparison, during the 2021-2023 pullback, trading volume shrank more moderately by 30% to 40%.

"For where we are in the current cycle, we’re probably through about 25%," Fraussen said. "Typically, we see the harshest retracements at about 50% into the cycle."

He estimates that it may take another 6 to 9 months for a meaningful recovery, and trading volume may stay subdued during the latter stages of correction and re-accumulation.

Regulatory tailwinds can't mask weak demand

Although the Trump administration’s shift to supporting crypto brought a string of regulatory victories, and institutional investment has surged, this hasn't stopped Bitcoin from falling. Many investors say the optimism was priced in early, sending prices up prematurely before stagnating.

Meanwhile, persistent outflows from spot ETFs suggest that conviction among mainstream buyers is weakening, with many currently underwater after buying at higher levels.

Digital asset treasury firms also slowed their purchases following a burst of their own stock price bubble last year, further eroding market buying power.

Paul Howard, a director at market maker Wincent, said: "I don't think we'll see a new Bitcoin high in 2026."

Intensifying capital competition dims recovery prospects

After the 2021 peak, it took Bitcoin 28 months to recover. Following the 2017 ICO boom, it took nearly three years. By those standards, the current slump may still be in its early stages.

Some see a more fundamental challenge: competition for capital. Richard Hodges, founder of Ferro BTC Volatility Fund, said he has warned large Bitcoin holders to be patient.

He pointed to the revival of AI-related stocks and precious metals, which are attracting macro and momentum traders. "Bitcoin is news from three years ago, not today," Hodges said. "AI stocks, gold, and silver are all surging."

Data shows Bitcoin’s volatility currently lags gold and silver, further weakening its appeal as a risk hedge and speculative target.

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