Bitcoin has fallen to its lowest level since November 2024. The market is waiting for an even bigger fall

Bitcoin continued its decline in trading on February 5 and approached the key $70,000 mark. During the Asian trading session, the cryptocurrency fell more than 3% to $70,052.38, reaching its lowest level since November 2024, Reuters writes. Over the past 24 hours, follows data from platform Coinmarketcap, the world's largest cryptocurrency has lost about 6% and is trading at $71,500 at the time of publication.

The world's second-largest cryptocurrency, ether, is also falling, Reuters points out. During Asian trading, it fell almost 2% to $2086.11. A drop below $2000 would be the first such instance for it since Ma last year, the agency points out. At the time of publication, ether is trading at $2113.

The latest collapse in the cryptocurrency market has been going on for about a week now - analysts point out that it was triggered, among other things, by the nomination of economist Kevin Warsh to head the U.S. Federal Reserve (Fed) on January 30. Market participants fear that, having taken the place of the chairman of the U.S. Central Bank, he may reduce the Fed's balance sheet, notes Reuters, pointing out that cryptocurrencies are often considered beneficiaries of a significant balance sheet, because they tend to grow in value when the Fed stimulates markets with liquidity, thus supporting speculative assets.

Amid this news, bitcoin has already lost more than 7% in a week, down almost 20% since the beginning of the year. Ether has fallen in price by almost 30% since the beginning of January, Reuters writes.

"The market fears that he [Warsh] will take a hawkish stance," Manuel Villegas Franceschi of the research team at Julius Baer remarked in a comment to the agency. - A balance sheet reduction will not provide any support for cryptocurrencies."

Analysts at Deutsche Bank estimated that there were outflows of more than $3 billion from U.S. spot bitcoin-ETFs in January. Last December, outflows totaled about $2 billion, and market participants withdrew $7 billion from bitcoin-related funds in the U.S. in November. "In our view, this sustained sell-off indicates that traditional investors are losing interest [in cryptocurrencies] and pessimism towards cryptocurrencies in general is growing," Deutsche Bank said (quoted by Reuters).

In early October last year, the cost of bitcoin rose above $126 thousand. Since then, the cryptocurrency has lost more than 40% in value.

Bloomberg wrote on Feb. 4 that contracts on Polymarket, a popular platform among crypto speculators, indicate an 82 percent probability of bitcoin falling to $65,000 in 2026 (down about 8 percent relative to current quotes), while traders on Polymarket estimate the likelihood of the cryptocurrency falling below $55,000 at about 60 percent. Meanwhile, the probability of a rebound that would take the cryptocurrency to $100,000 has fallen to 54% on Polymarket from 80% at the beginning of the year.

This article was AI-translated and verified by a human editor