Bitcoin and Ethereum posted the largest weekly percentage declines since November 2022, with Bitcoin decreasing by 17.3% to approximately $61,000 and Ethereum falling 22% to $1,550. The combined market capitalization of digital assets contracted by roughly $390 billion during this period, according to CoinGlass and TradingView data.
Liquidations spiked across over-the-counter and derivatives markets, with more than $7 billion in leveraged positions forcibly closed. Long positions represented approximately 82% of these liquidations, intensifying downward price momentum and further undermining market confidence among both retail traders and institutional allocators.
Spot Bitcoin ETFs endured persistent net outflows as investors reallocated capital toward technology stocks, particularly those linked to artificial intelligence and semiconductor sectors. Wall Street brokerage reports cited a rotation driven by earnings expectations and the potential for sustained high demand in AI computing infrastructure, which contrasted with digital asset market volatility.
Contributors to the sell-off included disclosure of a Bitcoin sale by publicly traded entity Strategy, marking the first divestment since late 2022. This action prompted concerns regarding the capacity of corporate treasuries and strategic reserves to support token valuations during periods of stress. Further pressure emerged from macroeconomic data releases indicating robust labor market conditions, fueling speculation that central banks might delay interest rate cuts.
Underlying technical indicators reflected oversold market structures. Metrics such as the relative strength index for Bitcoin reached levels not seen since the 2020 pandemic-induced crash, aligning with historical patterns of temporary market inflection points. However, absence of clear directional signals led to extended price consolidation around key support zones near $60,000 for Bitcoin and $1,500 for Ethereum.
Altcoin performance varied significantly. Data from decentralized exchanges revealed that total value locked in decentralized finance protocols fluctuated as asset prices adjusted, while protocols addressing privacy and smart contract functionality attracted divergent levels of trading volume. Emerging blockchain networks with recent mainnet launches recorded temporary spikes in transaction activity, although sustainable growth remained uncertain amid broader market retrenchment.
Market participants focused on potential near-term triggers for reversal, including scheduled token unlocks, regulatory updates concerning securities classification, and anticipated institutional custody solutions. Collective sentiment among investors and analysts remained cautious, with emphasis on risk management strategies and hedging through options markets to mitigate exposure to continued price declines.
Outlook for the coming week hinged on macroeconomic events, earnings reports from major technology firms, and developments in digital asset infrastructure. Renewed interest in staking yields and protocol-level incentive programs offered alternative avenues for capital deployment, even as spot trading volumes adjusted to lower levels. Overall, the magnitude of the weekly drawdown represented a test of market resilience and signaled potential consolidation phase before next directional move.
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