Bitcoin’s brief rally fizzled out on Wednesday as volatility continued for the world’s biggest cryptocurrency.
Bitcoin It was trading at about $66,737 as of 5:46 a.m. ET Wednesday.
The digital coin has been on a downward trend since hitting an all-time high of over $126,000 in October, with the decline intensifying last month. Bitcoin fell below $70,000 on February 5, but has fallen to just above $60,000, which is seen as a critical level.
Bitcoin subsequently recovered from these lows and rose above $70,000, but struggled to rise further from there, remaining in the $66,000 to $72,000 range.
On Thursday, Bitcoin fell about 47% below its all-time high.
Bitcoin price in the past month
Several factors are weighing on the cryptocurrency market, including the volatility of U.S. technology stocks, where crypto assets often move in tandem.
Meanwhile, the February 5 selloff was caused by a wave of liquidations, where traders are forced to close their positions when Bitcoin price reaches a certain point. This can have a knock-on effect and hurt sales. These liquidations have since slowed down.
Investors are also considering whether there will be a change in U.S. monetary policy after President Donald Trump nominated Kevin Warsh to chair the Federal Reserve late last month.
Selling from issuers of Bitcoin exchange-traded funds (ETFs), which are large holders of the digital coin, led to outflows from these ETFs. That added to the pressure on digital coins. However, over the past three days, Bitcoin ETFs have recorded net inflows.
Bitcoin cycle comes back into focus
Market participants are keeping an eye on whether Bitcoin’s typical cycle remains intact. This refers to a historical pattern following an event known as a halving, which often results in a new all-time high for a cryptocurrency, followed by a crash before making a new high.
The Bitcoin halving (a quadrennial event written into the code) reduces the rewards given to Bitcoin miners, effectively slowing the supply of Bitcoin to the market. Supply tightness typically occurs before Bitcoin hits new all-time highs. The most recent halving took place in April 2024.
There has been debate as to whether the typical Bitcoin cycle is over or whether the pattern is breaking. But investors and analysts suggest the cycle is largely intact.
“We expect 2026 to be the bearish phase of the four-year cycle,” Canary Capital CEO Stephen McClurg told CNBC on Wednesday. “Since the introduction of Bitcoin, we have experienced several four-year cycles, and this is no different than any other coin.”
McClurg added that he expects Bitcoin to fall to $50,000 in the summer before “things pick up in the fall.”
Markus Thielen of 10X Research told CNBC last week that Bitcoin could fall to the $50,000 level.
