Bitcoin fell below $80,000 on Friday, extending its decline to 27% from its all-time high of $109,000 reached in January.
The largest crypto by market value has now dropped beneath its 200-day moving average, a key technical indicator often watched by traders to assess long-term trend strength.
The decline follows accelerating outflows from Bitcoin ETFs, which had fueled much of the rally to record highs.
Over the month of February, investors have pulled more than $2 billion from spot Bitcoin ETFs, the most significant weekly outflows since their inception.
Meanwhile, gold ETFs have seen inflows rise, suggesting investors are shifting toward traditional safe-haven assets amid broader macroeconomic uncertainty.
Still, the latest drawdown is relatively mild compared to past Bitcoin cycles.
Historical data shows Bitcoin has experienced at least 16 significant corrections from all-time highs, with declines ranging from 30% to 85% before eventually recovering.
The current downturn mirrors a similar 33% drop between March and August 2024, which took 144 days to reach a new high in November.
More severe declines, such as the 78% plunge in 2021-2022 and the 84% drop in 2018, took significantly longer to recover, with multi-year timelines before fresh highs were reached.
Macro Pressures and Market Shifts
The pullback comes as traders reassess expectations for Federal Reserve interest rate cuts, with persistent inflation data reducing the likelihood of imminent easing.
Higher rates typically weigh on risk assets, including Bitcoin, which rallied in late 2024 partly on expectations of a looser monetary environment.
Market jitters have been compounded by geopolitical tensions following the Trump administration’s decision to impose tariffs on China, Mexico, and Canada, which has pressured global financial markets.
The stronger U.S. dollar and declining Treasury yields have added further headwinds to Bitcoin’s momentum.
Building on negative sentiment, a $1.5 billion security breach on the Bybit exchange—the most significant crypto theft in history—has raised concerns about digital asset security, with some analysts linking the event to increased selling pressure.
Despite the correction, Bitcoin’s long-term holders appear to be staying put.
On-chain data indicates that most selling pressure is coming from newer investors, while wallets holding Bitcoin for extended periods remain relatively inactive.
Bitcoin’s next move remains uncertain. Historically, corrections of this size have taken anywhere from weeks to over a year to recover, depending on macro conditions and market sentiment.
Traders are now closely watching support levels around $75,000 and ETF flows for signs of renewed demand, analysts have told Decrypt.
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