Mumbai, Feb 6 (NationPress) The largest cryptocurrency in the world, Bitcoin, has continued its downward trend on Friday, dropping more than 6 percent to approximately $66,198. This decline is attributed to risk aversion, significant liquidations, weakness in tech stocks, and concerns regarding a tighter monetary policy in the US, which has unsettled investors.

On Thursday, Bitcoin experienced its most significant single-day drop since late 2024, plummeting by 12.6 percent to about $63,300, marking its lowest value since October 2024 and erasing billions in asset value, according to multiple reports.

Experts noted that global investors withdrawing from riskier assets led to a decline in cryptocurrency values, with the volatility from both precious metals and tech stocks affecting this segment.

Data from cryptocurrency market analytics platforms indicated that nearly $1 billion in Bitcoin positions were liquidated within a 24-hour window, prompting a chain reaction across the cryptocurrency markets. Over the past week, Bitcoin has dropped by 20.22 percent, 28.86 percent over the month, and 32.85 percent year-over-year.

Ether, the second-largest cryptocurrency, also fell by more than 13 percent in a single day, with losses nearing 38 percent in 2026 thus far.

Market analysts suggested that the current cycle may point towards a prolonged reset in the cryptocurrency market rather than a short-term correction.

The decline in crypto enthusiasm intensified following US President Donald Trump's nomination of Kevin Warsh for the Federal Reserve chair. Many investors are concerned that Warsh's more hawkish stance could lead to a reduction in the central bank's balance sheet, thereby removing liquidity that has previously supported risk assets.

Long-term pressures on cryptocurrency assets are also emerging from institutional withdrawals, highlighted by outflows exceeding $3 billion in January from US spot Bitcoin ETFs.

Bitcoin's price trends have closely followed those of technology stocks, and the ongoing sell-off in software and AI-linked equities has exacerbated Bitcoin's losses as investors reduce their exposure.

Market observers also cautioned that if prices continue to drop, forced liquidations among crypto miners could occur as they face cash flow challenges.

In 2025, the US announced the establishment of a Strategic Bitcoin Reserve, which underscored Bitcoin's increasing significance on national and strategic levels. This move was largely interpreted as a sign of growing acceptance of digital assets within traditional financial frameworks.

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