Bitcoin’s prolonged downtrend shows no sign of easing, with the world’s largest cryptocurrency struggling to reverse its downward trajectory amid weak risk appetite and a shift in investor focus toward artificial intelligence.
Extending its losses on Friday, Bitcoin fell to as low as $58,000, its lowest level in nearly 20 months, as investors grappled with elevated U.S. inflation, a broad sell-off in global technology stocks and persistent uncertainty over the near-term outlook for cryptocurrencies.
Bitcoin was last trading at around $59,688, down more than 3% over the past 24 hours, with its market capitalisation slipping to approximately $1.19 trillion.
The cryptocurrency is now trading nearly 53% below its all-time high of $126,198.07 reached in October 2025. Its market value has also nearly halved from a peak of around $2.5 trillion, wiping out more than $1.3 trillion in investor wealth.
Analysts attributed the latest decline to a combination of macroeconomic pressures, profit-taking by large investors and weakening risk appetite amid growing investor interest in artificial intelligence-related investments.
Akshat Siddhant, Lead Quant Analyst at Mudrex, said Bitcoin touched 21-month lows after U.S. personal consumption expenditures (PCE) inflation data came in higher than expected, triggering a fresh wave of selling despite a brief recovery toward $61,000.
The decline resulted in nearly $600 million worth of crypto liquidations within an hour, accelerating downside momentum. Markets are also bracing for a $10-billion options expiry, which could add to near-term volatility.
According to Siddhant, spot Bitcoin exchange-traded funds continue to witness outflows, although the pace has slowed significantly from roughly 4,400 BTC per day to around 625 BTC, suggesting that selling pressure may be easing.
“Until a stronger positive catalyst emerges, $56,000 remains the key support level. A break below that level could lead to further weakness,” he said.
Investor sentiment has also been affected by delays in U.S. crypto legislation. Market participants are closely watching key economic indicators, including inflation data, GDP figures and jobless claims, which could influence the Federal Reserve’s interest-rate outlook and, in turn, crypto markets.
Vikaas M. Sachdeva, Chief Executive Officer of BitDelta India, said the recent correction reflects a combination of macroeconomic and market-specific factors rather than a structural shift in the long-term outlook for digital assets.
“A broad sell-off in global technology stocks, renewed concerns over inflation and interest rates in the U.S., and a temporary shift in investor attention toward AI-led opportunities have contributed to a more cautious risk environment,” he said.
He added that the market is also navigating a period of limited near-term catalysts, including uncertainty over the timing and implementation of key U.S. crypto regulations.
CoinSwitch Markets Desk said large investors, or whales, have been reducing holdings, adding supply to a market that has struggled to absorb selling pressure. The firm noted that investor attention has increasingly shifted toward artificial intelligence investments, reducing risk appetite for cryptocurrencies.
Analysts at CoinSwitch identified $55,000 as a crucial support level, while the $61,000-$62,000 zone remains important for Bitcoin to reclaim in order to improve market sentiment. “Most see this as a wider market cooldown rather than anything broken in crypto itself. For now, Investors can keep an eye on $55K as support and $61K-62K as the level to reclaim, and keep position sizes sensible.”
Meanwhile, WazirX Markets Desk said stronger-than-expected U.S. inflation data and long liquidations have weighed on both Bitcoin and Ethereum, with the latter trading near $1,525. “Both assets facing short-term pressure after stronger-than-expected U.S. inflation data prompted a cautious market response.”
However, falling crude oil prices could provide some relief. Brent crude has slipped below $70 a barrel, easing concerns over energy-driven inflation and potentially creating a more supportive environment for risk assets, including cryptocurrencies.
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