Bitcoin falls below $80k as $1 trillion in unrealized profits disappears amid crypto market chaos.

Bitcoin has fallen below $80,000, reaching its lowest point since November 2024, as the overall cryptocurrency market faces a significant downturn.

The ongoing sell-off has wiped out nearly all gains seen following Donald Trump’s election win, indicating a phase of extreme volatility.

$1 trillion loss

Data from CryptoSlate indicates that Bitcoin declined by over 8% in the last 24 hours, briefly reaching $78,790 before bouncing back to $79,200.

In the past week, the leading digital currency has lost 20%, dropping from over $100,000 to its current price.

With this decline, Bitcoin’s value has reverted to levels last observed after Trump’s election victory in November 2024.

Meanwhile, the downturn is not confined to Bitcoin alone. Major altcoins have also experienced significant losses.

Ethereum has plummeted nearly 50% from its post-election high in late 2024, while BNB, Solana, XRP, Dogecoin, and Cardano have each lost up to 10% in the past 24 hours.

As a result, the total unrealized losses across the market have exceeded $1 trillion in the past month, reflecting growing investor anxiety.

Crypto market cap fell by $1 trillion (Source: CoinMarketCap)

This volatility has led to widespread liquidations. Data from CoinGlass shows that over $918 million in leveraged positions have been liquidated, affecting more than 225,000 traders.

Most of these losses impacted long traders who were betting on price increases, with $810 million liquidated. Anticipating further declines, short traders also saw $108 million wiped out.

However, despite this turmoil, cryptocurrency enthusiasts argue that such corrections are common in the market.

Marc van der Chijs, co-founder of Bitcoin miner Hut8, commented on X:

“Markets are extremely anxious, but when you zoom out, you’ll see that nothing has changed. 30% drops occur several times in each bull market, usually followed by a massive price surge.”

Why is the market crashing?

Market analysts attribute the ongoing decline to a combination of factors, including uncertainty regarding Donald Trump’s tariff policies, diminished investor confidence, and a significant $3 billion outflow from Bitcoin spot ETFs.

According to The Kobeissi Letter, fears of a trade war have greatly affected risk assets, eliminating $800 billion from the cryptocurrency market since January 20.

The firm noted that during such trade war periods, liquidity tends to gravitate towards the US dollar, which is viewed as a more stable asset in times of economic uncertainty. It also pointed out that the crypto market is now ten times larger than during previous trade conflicts, exacerbating price volatility.

The Kobeissi Letter explained:

“The perceived lack of STABILITY during trade wars concerns retail investors. Consequently, we see significant daily outflows as the ‘herd’ moves in unison… This is why BTC can drop $5,000+ in minutes.”

Moreover, investor sentiment remains weak, with the Crypto Fear & Greed Index dropping to 21 and approaching “extreme fear” levels.

This is the lowest reading since the 2022 bear market, which was triggered by the collapse of several crypto firms, including FTX, Celsius, Voyager, and others.

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