Bitcoin falls below $80,000, ushering in a new round of "trust crisis"

Bitcoin has fallen below the $80,000 mark, dipping below $76,000 at one point, a decline of about 40% from its 2025 peak, raising concerns that the market's price adjustment is evolving into a loss of confidence.

The latest round of declines occurred during a weekend trading session with thin liquidity, where Bitcoin briefly fell below $76,000, before weakly oscillating between $77,000 and $79,000. It has returned to the price range seen after the previous "Liberation Day" tariff shock.

What further unsettles the market is that this round of pullback lacks a clear triggering factor. There have been no signs of a chain liquidation or systemic shock; instead, the selling pressure seems to be shaped by a lack of buying interest, declining momentum, and weakened conviction, making the price decline more persistent.

Meanwhile, Bitcoin has been sluggish in responding to common drivers such as geopolitical tensions, a weakening dollar, and rebounds in risk assets. Funds have not noticeably rotated into crypto assets amid the recent volatility in gold and silver, reinforcing the narrative of its temporary "decoupling" and diminishing marginal influence.

Longest Consecutive Decline Since 2018

Bitcoin fell below $76,000 over the weekend. The sharp decline that began in October has evolved into a sustained sell-off. This time, it is not driven by panic but shaped by a lack of buyers, momentum, and conviction.

The nearly 11% drop in January marks Bitcoin's fourth consecutive month of decline, the longest streak since 2018.

Unlike the pullback in October, this round of decline has no obvious trigger, chain liquidations, or systemic shocks. It can be observed that Bitcoin is decoupling from other mainstream financial markets, with demand waning and liquidity decreasing.

Notably, there is a relative lack of optimism on social media, and Bitcoin's decline has hardly sparked enthusiasm for bottom-fishing.

Market Depth Shrinks Over 30%, Liquidity Crisis

According to Kaiko data, Bitcoin's market depth has decreased by over 30% from its peak in October. The last time liquidity fell to such low levels was after the FTX collapse in 2022.

"From the peak in 2017 to the bear market in 2018-2019, we saw spot exchange trading volumes drop by 60% to 70%," said Kaiko analyst Laurens Fraussen. In contrast, during the pullback from 2021 to 2023, the contraction in trading volume was more moderate, between 30% and 40%.

"In terms of where we are in the current cycle, we may have gone through about 25%," Fraussen said. "From a cyclical perspective, we typically see the most severe pullbacks around 50%."

He estimates that it may take another 6 to 9 months for a meaningful recovery, and during the later stages of correction and reaccumulation, trading volume may remain sluggish.

Regulatory Positives Can't Mask Weak Demand

Despite a series of regulatory victories brought about by the Trump administration's shift to support cryptocurrencies and a surge in institutional investment, none of this has stopped Bitcoin's decline. Many investors have stated that the optimism has been priced in early, leading to a rise in prices that then stagnated.

Meanwhile, the continuous outflow from spot ETFs indicates that mainstream buyers' conviction is weakening, with many currently underwater after buying at high levels The digital asset treasury company has also slowed its purchasing pace after the collapse of its own stock price last year, further weakening the market's purchasing power.

Paul Howard, director of market maker Wincent, stated, "I don't think we will see Bitcoin reach new highs in 2026."

Intensifying Capital Competition, Dim Recovery Prospects

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

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

He pointed out that the resurgence of AI-related stocks and precious metals has attracted macro traders and momentum traders. "Bitcoin is yesterday's news, not today's," Hodges said, "AI stocks, gold, and silver are all rising significantly."

Data shows that Bitcoin's volatility is currently lagging behind gold and silver, further weakening its appeal as a risk hedging tool and speculative target