The drop in Bitcoin has pushed the price below $70,000. What you need to know

Cryptocurrency prices have plummeted in recent weeks, with some analysts warning of more pain ahead for investors.

price of BitcoinThe most popular cryptocurrency fell below $66,000 on Thursday afternoon, its lowest level in more than a year. Analysts were eyeing $70,000 as a psychological threshold where the price is likely to break further.

The digital asset has fallen nearly 50% from its recent highs in October, when Bitcoin peaked at around $126,000. Bitcoin was down more than 10% in Thursday trading as of 2:45 p.m. ET.

Barry Bannister, chief equity strategist at Stifel, said in a research note on Wednesday that Bitcoin could eventually fall by about 70% and bottom near $38,000.

He said he reached that conclusion based on trends and price movements during past “Bitcoin superbears,” or periods of sharp declines.

“This is not a ‘bull market correction’ or a ‘downfall,’” Matt Hogan, chief investment officer at crypto asset management firm Bitwise Asset Management, said in a note on Monday.

“This is a full-fledged, 2022-like, Leonardo DiCaprio-like crypto winter, set in motion by factors ranging from over-leverage to widespread profit-taking by OG,” Hogan wrote. OG refers to the early investors in Bitcoin.

The drop in cryptocurrencies comes amid widespread support for cryptocurrencies by President Donald Trump and his administration.

During his campaign, Trump promised to make the United States a “Bitcoin superpower” and said he wanted to make the United States the “crypto capital of the world.” President Trump signed an executive order promoting digital assets within days of taking office, and the White House and U.S. regulators have been pushing for supportive policies.

Bitcoin ETFs began trading on U.S. stock exchanges about two years ago, making it easier for investors to buy and sell the cryptocurrency.

So why have crypto prices fallen in recent weeks and months?

Hogan said that’s because “good news doesn’t matter” in the “depths” of crypto winters, such as those seen in 2018 and 2022.

“We are not going to rally just because Wall Street is hiring aggressively or Morgan Stanley is ramping up its crypto investments,” he wrote. “That’s important in the long run, but not right now. Crypto winter won’t end in excitement, it will end in exhaustion.”

The current one is said to have started in January 2025.

But because of the enthusiasm for digital assets among institutional investors, which wasn’t immediately apparent at the time, Hogan said the “hard winter” was “undone” among retail investors.

Analysts also noted other contributors.

For example, since mid-2025, “credit stress in the tech sector has been increasing,” according to Stifel’s Bannister, causing the price of Bitcoin, which is considered a “speculative tech stock-like product,” to decline.

Bannister wrote that Bitcoin is also selling off amid a broad decline in growth stocks and “hawkish” interest rate cuts by the Federal Reserve.

Bannister said that a “hawkish rate cut” (meaning the central bank cut interest rates but indicated it could take some time before cutting again) is “spooky” for Bitcoin, which, like Nasdaq 100 stocks, tends to rise on “dovish” policy. Dovish policy aims to lower interest rates to promote economic growth and employment.

According to Hogan, crypto winters typically last around 13 months, meaning the current winter could end soon.

“What could be causing the cloud to dissipate? Strong economic growth causing an aggressive risk-on rally, a positive surprise to the Clarity Act, signs of sovereign adoption of Bitcoin, or simply the passage of time,” he said.

The so-called Clarity Act aims to provide legal guardrails for cryptocurrency markets and large digital asset companies, which could accelerate the adoption of blockchain technology and cryptocurrencies in the United States.

Experts say the drop in prices has made it important for investors to be intuitive about Bitcoin and cryptocurrencies.

Generally speaking, Bitcoin is a volatile asset. That is, the profits can be large, but the losses can also be large. Financial advisors typically recommend limiting Bitcoin and other digital assets to a small portion of your portfolio.

“To me, you should never own more than 5% in any concentrated asset,” said Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Fla., and a member of the CNBC Financial Advisors Council.

But even with a small stake in cryptocurrencies, “you need to have an investment process and understand when to buy and sell,” said Ivory Johnson, CFP and founder of Delancey Wealth Management in Washington, who is also a board member. He said he sold his client’s shares when the price was about $80,000 and still made a profit.

As with any investment, you need to know why you own cryptocurrencies.

“In my opinion, if you are optimistic about Bitcoin long-term,[this decline]is a buying opportunity,” said Barry Glassman, CFP and founder and president of Glassman Wealth Services in Vienna, Virginia, and a member of the CNBC Financial Advisors Council.

Although he does not invest client assets in Bitcoin, he said about half of his clients have exposure through brokerage accounts or crypto wallets.

Glassman also pointed out that Bitcoin has experienced significant declines in the past. For example, in November 2022, it was trading around $16,360 after reaching $65,500 a year ago, a 75% decline.

On the other hand, if you bought Bitcoin at a higher price than it is now, “ask yourself, ‘Would I buy Bitcoin today?'” McClanahan said.

“If you can’t tell yourself that’s the way to go if you’re buying today, then you should probably sell your holdings,” she says.

If you sell your Bitcoin for a lower price than when you bought it, you can use the loss to offset gains from other investments and rebalance your portfolio (so-called loss recovery).

Also, be aware of the wash sale rule, which prevents you from losing money if you buy the same or substantially the same investment within 30 days.

This rule does not apply if you own Bitcoin directly. It is possible to recognize a loss even if you sell and buy back immediately. However, if you own Bitcoin through an ETF, you must wait at least 30 days to buy it back, as losses on sale are subject to this rule.

Additionally, if your losses exceed your profits for the year, you can use up to $3,000 of your losses to offset other income on your tax return, McClanahan said. Any remaining losses are carried forward to future tax years.