Bitcoin Drops 7% and Loses Multi-month Gains Amid Market Drawdown

Bitcoin extended its sharp sell-off late Thursday, falling nearly 7% in 24 hours to trade around $82,000 after briefly dipping as low as $81,000 during U.S. trading hours. 

The decline erased multi-month gains from Bitcoin’s price in a single day and triggered a wave of forced liquidations across the crypto market, highlighting renewed fragility in risk assets. 

According to CoinGlass data, more than $880 million worth of crypto long positions were liquidated within one hour during the steepest part of the drop, with total liquidations reaching about $1.68 billion over the past 24 hours. 

The broader cryptocurrency market followed Bitcoin’s decline, with major tokens falling between 7%–9%. Ethereum was floating close to $2,750, as BNB and XRP were trading at approximately $850 and $1.75, respectively.

At current levels, Bitcoin is trading just above its November dip near $81,000. Market participants are closely watching this zone, as a decisive break could open the door to a deeper move toward the April 2025 lows near $75,000, which formed during tariff-related market stress earlier in the year.

Fed leadership speculation rattles risk assets

One of the factors weighing on sentiment appears to be renewed uncertainty around U.S. monetary policy leadership. Traders reacted to reports that President Donald Trump may nominate former Federal Reserve Board member Kevin Warsh to replace current Fed Chair Jerome Powell. 

Trump said he would announce his nominee on Friday, a day after publicly criticizing the Fed for not cutting interest rates. Prediction market Polymarket showed odds of Warsh being selected surging to 90%, up sharply from 37% just hours earlier.  

Before the shift, some investors had expected a more dovish candidate, such as BlackRock fixed-income chief Rick Rieder. This threat of an even more aggressive Fed policy puts additional strain on already weak crypto markets, which are extremely sensitive to liquidity expectations.

Analysts see correction, not collapse

Despite the sharp move, several analysts describe the current decline as a corrective phase rather than a structural breakdown. Technically, Bitcoin failed to hold a rebound above $83,800, keeping downside risks in focus. Some analysts now point to the November low near $80,600 as a near-term test.

Market analyst CryptoZeno noted that Bitcoin’s returns have turned negative in recent months, down about 26% since last July, following a strong expansion phase in mid-2025. 

The concept of leverage unwinding is supported by derivatives data. Previous declines of 8% to 10% in futures open interest have been accompanied by local price lows, such as declines in February-March, early April, and mid-November 2025.

These patterns suggest forced selling may be approaching exhaustion rather than signaling a prolonged downtrend.

Strategy stock slides as Bitcoin breaks key support

The sell-off also hit crypto-linked equities. Strategy Inc. (NASDAQ: MSTR), widely known for holding Bitcoin as a core treasury asset, fell as much as 9.63% on Thursday, trading near $143, close to its 52-week low. 

The stock often amplifies Bitcoin’s moves due to the company’s large exposure. Earlier this week, Strategy bought 2,932 BTC for $264 million, lifting its total holdings to 712,647 BTC, roughly 3.4% of Bitcoin’s fixed supply. 

While the accumulation underscores long-term conviction, the recent price drop highlights the short-term volatility risks tied to corporate Bitcoin strategies. Investors are, at least, considering macro uncertainty, heavy lever unwinds, and key technical levels. 

It will probably be determined by the overall market response to the changes in Fed leadership and liquidity expectations in the coming days whether Bitcoin will stabilize around the existing support or fall further.

Also Read: Bitcoin Falls Below $85K as $850M Gets Liquidated in Market Sell-Off

Disclaimer: The information researched and reported by The Crypto Times is for informational purposes only and is not a substitute for professional financial advice. Investing in crypto assets involves significant risk due to market volatility. Always Do Your Own Research (DYOR) and consult with a qualified Financial Advisor before making any investment decisions.