Bitcoin’s recent downturn has left a wave of new investors grappling with significant losses, as the cryptocurrency market succumbs to a broader selloff in global stocks. The largest digital asset, which surged to a record high following Donald Trump’s U.S. presidential victory, has now tumbled into a bear market.
Barely six weeks into Trump’s presidency, Bitcoin is trading at around $80,000, marking a sharp decline of nearly 25% from its January peak of $109,071. The correction has particularly impacted latecomers who entered the market at the height of crypto euphoria, many of whom leveraged borrowed funds to chase rising prices.
Crypto analytics firm Glassnode reports that approximately 20 million new Bitcoin addresses—accounting for 1.5% of all addresses in existence—were created in the past three months, highlighting the influx of new retail investors. However, many are now finding themselves in a precarious position as prices retreat.
The spent output profit ratio, a key indicator measuring the profitability of Bitcoin transactions, has dropped to 0.95—its lowest level in over a year—signaling that recent buyers are realizing steep losses. According to analysts at crypto exchange Bitfinex, this decline underscores the exceptionally challenging conditions for newer investors.
Bitcoin’s meteoric rise in January, fueled by optimism surrounding Trump’s executive order to establish a Bitcoin strategic reserve, was short-lived. The subsequent selloff has been exacerbated by mounting concerns over U.S. tariff policies, economic stability, and a broader slump in technology stocks.
“I was surprised to see Bitcoin at $80,000, and it looks like the bloodletting hasn’t ended yet,” said Kevin Dede, an analyst at investment bank H.C. Wainwright.
While some analysts believe Bitcoin may find support around the $73,500 level, others warn that market sentiment remains fragile. John Glover, Chief Investment Officer at crypto lending platform Ledn, acknowledged the severity of the selloff, stating, “This corrective phase has caught many by surprise.”
Traders with leveraged positions have borne the brunt of the downturn, with daily realized losses exceeding $800 million on multiple occasions, particularly on February 28 and March 4, according to Bitfinex analysts.
The bearish trend has also reflected in investment products tracking digital assets, which have witnessed outflows for the fourth consecutive week, as per data from CoinShares.
With Bitcoin’s volatility once again on full display, the recent downturn serves as a stark reminder of the risks inherent in crypto markets, particularly for those drawn in by speculative fervor. As institutional and retail investors reassess their positions, the coming weeks could prove decisive for Bitcoin’s short-term trajectory.
