“This is absolutely INSANE.”
Although the comment came from a social media post, the painful knee-jerk reaction will likely reverberate across the board for anyone even remotely interested in crypto, as bitcoin just plunged to nearly $77,000 on Saturday and has held there since.
The price of the largest digital asset has not only stumbled; it plunged past the $80,000 floor, reaching levels not seen since the “tariff crises” of April 2025.
As of Saturday afternoon, amid low weekend liquidity, at just over $77,000, bitcoin’s market value had been $800 billion gone since its October peak above $126,000, and about $2.5 billion of leveraged long positions were liquidated in 24 hours.
This erasure even pushed bitcoin out of the top 10 global assets, where it had long been, behind institutional heavyweights like Elon Musk’s Tesla and Saudi Aramco.
To say this sale was painful would be an understatement as social media is in a panic and everywhere you look there is blood on the streets. And this is not limited to Bitcoin; this week has been painful for all types of assets, from technology stocks to precious metals.
If you are wondering why the “digital gold” narrative has suddenly gone silent, here is the collapse of the three-headed monster that is currently plunging the market into a state of “extreme fear”.
1. Geopolitics undermines the “security” business
The immediate spark on Saturday was a real explosion. Reports of a potential brutal military escalation between the United States and Iran have sent risk appetite into a deep freeze. In a repeat of a familiar scenario, traders did not treat bitcoin as a safe haven; they treated it as a source of liquidity.
In times of war, investors typically engage in a “flight to safety,” moving their capital into the U.S. dollar. Since Bitcoin is a 24/7 market, it often acts as the “first responder” in times of global panic. On Saturday, it served as a global ATM, sold to cover losses and find safety amid a lean weekend and low liquidity.
Not to mention that liquidity, since the crash of October 10 (which pointed the finger at Binance), has never recovered, which makes market dynamics even more fragile heading into this weekend.
2. Gold and Silver Face a “Hard Money” Reset
Bitcoin was not the only victim this week. The broader commercial “store of value” has been under siege. Gold plunged 9% in a single trading session on Friday, to just under $4,900, while silver suffered a historic crash of 26%, to $85.30.
In a bizarre twist, the traditional “safe havens” of gold and silver are being sold alongside crypto. Analysts suggest that the massive rally in the US dollar – triggered by the appointment of Kevin Warsh as head of the Fed – has made these dollar-valued metals too expensive for international buyers, leading to massive “de-risking” across all hard assets.
As Sunday trading begins, gold and silver are rebounding from a tough Friday, up 1% and 3%, respectively. Currently, gold is trading near $4,730 and silver is around $81.
3. The “liquidation trap”
The geopolitical shock hit a market already “bruised” by the changing political landscape in Washington. The price drop triggered a massive mechanical breakdown in the markets.
According to Coinglass data, more than $850 million in bullish bets (long positions) were wiped out in a matter of hours on Saturday as prices began to collapse, eventually reaching nearly $2.5 billion. These liquidations occur when traders borrow money to bet that the price will rise; Once the price hits a certain “trap”, exchanges automatically sell their holdings to pay off debt. This creates a “domino effect”: forced sales cause prices to fall, which triggers even more liquidations. Overall, nearly 200,000 traders saw their accounts “exploded” on Saturday.
4. Michael Saylor’s Very Bad Day
To make matters worse, the price of bitcoin briefly dipped below Michael Saylor’s (MSTR) strategy’s average entry point of around $76,037, putting his massive bitcoin stack “underwater.” Panic set in that he might be forced to sell his stash, which would make the sale even deadlier.
However, CoinDesk debunked this theory, explaining that Saylor will not be forced to sell his bitcoin stash, given that none of his coins are pledged as collateral. What this means, however, is that it will hinder its ability to raise cheap capital to buy more bitcoins on the open market.
Although Saylor later signaled that he would “buy the dip, the damage was done.” The market realized that if a large company, such as Strategy, could not raise more capital to purchase bitcoin on the open market, the already fragile market would be left without buyers, becoming vulnerable to forced liquidations and profit-taking.
As a result, sentiment has shifted from “lunar” optimism to defensive hedging, as investors rush to buy price insurance in the options market against further declines toward $75,000.
5. Wall Street on edge: US futures turn red
The contagion is already spreading to traditional finance.
With the New York Stock Exchange closed for the weekend, U.S. stock futures, which opened trading Sunday evening (U.S. East Coast time), are broadly lower; the Nasdaq is down 1% and the S&P 500 is down 0.6%.
Get ready for a potentially complicated Monday!
6. Whales against the world: the story of two investors
Perhaps the most telling aspect of this crash is not the price; This is the wallet data.
According to Glassnode data, small investors are on the run. “Small Fish” (holders holding less than 10 BTC) have been regularly selling Bitcoin for more than a month. They are capitulating, scared by a 35% drop from the all-time high of $126,000.
Meanwhile, “mega-whales” (those holding more than 1,000 BTC) have been quietly adding to their piles. This cohort is now back at levels not seen since late 2024, effectively absorbing the coins that panicked retail traders are throwing away. Although their purchases were not large enough to drive up the price.
7. Big Picture: Inevitable Human Greed
Now let’s zoom out and compare this weekend’s selloff and current market dynamics with those that have occurred before.
To be clear, this cycle is not entirely pessimistic. Companies like BlackRock and JPMorgan in traditional finance have gone all-in on crypto through exchange-traded funds and stablecoins. Regulatory frameworks are being created around the world to make crypto more accessible and usable by the general public, and many legitimate crypto companies are listed on stock exchanges and are part of many fund managers’ “must-have” stock allocations. None of these were even unthinkable in previous cycles.
But the parallels between the last four months and the start of the crypto winter in late 2021/early 2022 are perhaps becoming more pronounced, and while the names and methods may have changed, human behavior and the boom-bust nature of the markets have not.
Companies like Three Arrows Capital, Do Kwon and TerraUSD, BlockFi and Sam Bankman-Fried could have been replaced by the Trump family’s so-called naked profits, Michael Saylor’s massive purchases and promises of an 11% risk-free rate in a 3% risk-free rate world, and well-followed crypto personalities on Twitter who teamed up with investment bankers to make a quick buck at digital asset treasury companies..
Just like in 2021, these new dynamics likely created a speculative bubble that likely collapsed in 2026. The only question now is how long and how deep the economic slowdown will be.
While no one has fond memories of the crypto winter of 2022 — with bitcoin’s price down 80% — the timeline was relatively brief, about a year from peak to trough. From there, the price of bitcoin quickly doubled, rose through 2023, and finally hit a new all-time high in early 2024.
In theory, if there was another 80% drop from the October 2025 high of $126,000, bitcoin would be at around $25,000. It’s a scary number to even think about, but it may be necessary to erase the worst of this past bull market and set the stage for another sustained rally.
The unraveling of the 2022 bear market came shortly after the collapse of FTX and the arrest of its CEO, Sam Bankman-Fried. Whether the bracelets will be necessary for any of this cycle’s bull market figures remains to be seen.
“It’s only when the tide goes out that you find out who’s swimming naked,” Warren Buffett said. The tide may not have fully ebbed yet, but it sure feels like it’s heading in that direction.
Read more: How instant gratification is sucking the air out of the bitcoin market
