- Bitcoin plunged further on Thursday.
- It’s now wiped out gains following the election of pro-crypto President Trump.
- But the bottom could be in.
Bitcoin erased all gains it made following the election of crypto-friendly US President Donald Trump, as jobs data sparked a selloff in all major asset classes.
The leading cryptocurrency was recently trading at $67,582, according to CoinGecko, after plunging 8% on Thursday.
Over the past week, the cryptocurrency has plummeted by more than 20%.
Besides bearish jobs data, analysts are also turning a keen eye to one of the largest Bitcoin buyers in the market: Strategy.
Laurens Fraussen, a research analyst at Kaiko, told DL News that all eyes will be on Strategy’s earnings call on Thursday.
The software company buys and holds Bitcoin, allowing investors to gain exposure to the asset through its shares. When the price of Bitcoin takes a hit, so does its stock price.
That, combined with other macroeconomic factors, has led the largest cryptocurrency to fall, Fraussen said.
“Regardless of any arbitrary numbers, I think some of the selling we’re seeing today is due to MSTR earnings happening today and the market risking off ahead of it,” he said.
He added that “anywhere between $60,000 to $70,000 should be a good area to bottom out.”
Bitcoin comes full circle
President Trump campaigned on a ticket to help the digital asset space and received backing from major crypto entrepreneurs.
His victory and subsequent inaugurations sent crypto markets soaring — but that’s all gone now.
In October, Bitcoin broke a new record at $126,080. It’s now 46% below that level.
The largest liquidation event in crypto history on October 10 wounded digital asset markets, and they’ve been struggling to recover ever since.
Now, Bitcoin will find a new “base” where it will trade over the coming months. Crypto exchange Kraken’s VP, Matt Howells Barby, said in a Thursday note that could well be “in the $54,000–$60,000 range.”
Mass layoffs
Data on Thursday revealed that US employers announced more layoffs than at any start of the year since 2009, catalysing a mass sell-off in precious metals and tech equities.
Silver fell sharply on Thursday, dropping 18%, while gold fell nearly 4%.
The tech-heavy Nasdaq was down by 1% Thursday afternoon in New York.
Still, pro-crypto regulation since Trump took office has led some analysts to believe that the drawback for Bitcoin won’t be as painful as in previous cycles.
From 2021 to 2022, Bitcoin plunged from over $69,000 to under $16,000 in a brutal selloff.
Diana Pires, VP at institutional investment platform sFOX, said in a note that a sustained drop below $60,000 to $70,000 would risk a sharper drop.
But she added that Thursday’s selloff represented “a broader risk-off repricing across global markets, not a crypto-specific breakdown.”
Update, February 5: This story has been updated to include new comments from analysts.
Mathew Di Salvo is a markets correspondent at DL News, and Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Have a tip? Reach out with tips at mdisalvo@dlnews.com and tim@dlnews.com.