Bitcoin falls below $78,000 as the Fed nomination and market exits raise concerns about new losses
Bitcoin (BTC-USD) continued its decline over the weekend, dropping to $75,400 on Saturday, extending losses from its January 14 high of $97,000.
The cryptocurrency has struggled to stay above key support levels, falling to $81,104 on Friday, the lowest level since November 21.
The wave of selling coincides with the nomination of former Federal Reserve Governor Kevin Warsh as the next Fed chair. Warsh has advocated for a smaller Fed balance sheet and a broader regime change at the central bank, raising concerns that liquidity may be restricted in the markets.
Historically, Bitcoin and other cryptocurrencies have benefited from periods of abundant liquidity, rallying alongside speculative assets such as metals, meme stocks, and bonds.
By Sunday afternoon, Bitcoin slightly recovered to $77,522, but trading patterns remain clearly bearish. Analysts note that the sequence of breakdowns at key support levels reinforces the view that Bitcoin has entered a bear market.
Some forecasts suggest new declines to $75,000 or even down to $10,000, although others warn that talking about panic may be premature.
The recent weakness of Bitcoin occurs in a context of widespread volatility in the market, with massive sell-offs in tech stocks and precious metals like gold and silver experiencing some of their largest drops in decades.
Analysts urge caution, noting that Warsh's nomination is seen as pragmatic rather than aggressive, and that Bitcoin's decline is largely viewed as uncertainty rather than a fundamental shift in the cryptocurrency's outlook.
