Bitcoin Plunges 15% Amid Market-Wide Sell-Off, Gold Surges

Bitcoin’s sharp decline to a daily low of $73,111—its lowest point in 15 months—is not occurring in isolation. The sell-off reflects a broad retreat from risk assets across both crypto and traditional markets. Major U.S. stock indices have tumbled, with the S&P 500 (SPX) and Nasdaq Composite (NDX) falling 1.41% and 2.22%, respectively, in the last trading session. This downturn has been led by popular tech stocks, most notably payments giant and stablecoin issuer PayPal (PYPL), which plunged more than 19% following its earnings report. The negative sentiment is further compounded by a partial U.S. government shutdown, now in its fourth day, which has added to macroeconomic uncertainty and investor caution.

The contagion has spread directly to crypto-related equities. Shares of major crypto exchange Coinbase and leading treasury firms Strategy and BitMine Immersion Technologies each fell more than 7% at the opening bell. This decline persists despite recent accumulation of such assets by firms like Cathie Wood’s Ark Invest, highlighting the overwhelming strength of the current risk-off wave. The synchronized drop across asset classes underscores a market-wide reassessment of risk, with investors fleeing volatile growth assets in favor of perceived safety.

Within the crypto sphere, the damage has been severe and widespread. While Bitcoin (BTC) has partially rebounded to $74,744, it remains down over 4% on the day. Its peers have fared even worse. Ethereum (ETH) dropped 9.6% to $2,118, and Solana (SOL) fell 7.1% to $97.10. Both altcoins now trade below their levels from the market bottom induced by Trump tariff threats last April and sit 57% and 67% below their respective 2025 all-time highs. This volatility has triggered a massive wave of liquidations. Data from CoinGlass shows that nearly $659 million worth of crypto positions were liquidated in the last 24 hours, with Bitcoin alone responsible for nearly $234 million in long liquidations.

More concerning than the price action, according to analysts, is a potential breakdown in Bitcoin’s core investment narrative. Alex Thorn, Head of Research at Galaxy Digital, points to a ‘debasement trade’ narrative violation. This thesis, which positions Bitcoin as a digital hedge against currency devaluation similar to gold (GLD), has been invalidated by recent price action. While Bitcoin has plunged, gold surged to a new all-time high above $5,600 per ounce last week and jumped nearly 6% on Tuesday alone to trade around $4,924. ‘That invalidation was apparent again on Tuesday, as BTC has fallen strongly in the face of another gold rally,’ Thorn noted. This divergence challenges a fundamental pillar of Bitcoin’s long-term value proposition for many institutional investors.

The outlook from here appears precarious. Alex Thorn has highlighted structural weakness in Bitcoin’s price and a lack of near-term catalysts, suggesting the asset could trend lower toward its 200-week moving average, which sits near $58,000. This would represent a significant further decline from current levels. The dramatic shift in market sentiment is starkly illustrated on prediction markets. On Myriad, a platform operated by Decrypt’s parent company Dastan, predictors have completely flipped their stance. Last week, odds stood at 70% in favor of Bitcoin jumping directly to $100,000. Now, predictors yield to bearish assumptions, with 75% odds favoring a drop to $69,000 before any potential pump to the $100,000 mark.

Amid the gloom, some high-profile Bitcoin bulls are attempting to reframe the narrative. Cathie Wood, whose Ark Invest has significant exposure to crypto assets, recently told investors that gold—not artificial intelligence—is likely in a bubble. However, with Bitcoin leading crypto liquidations, traditional indices falling, and gold rallying powerfully, the current market dynamics present a formidable challenge to the bullish thesis. The convergence of a U.S. government shutdown, tech stock weakness, and a flight to traditional safe havens like gold has created a perfect storm from which Bitcoin and the broader crypto market are struggling to escape.