Analysis: Why has Bitcoin lost nearly 30% in 7 weeks since its $109K all-time high?

For seven weeks in a row, Bitcoin price has experienced several retracements, falling from its peak of $109,000 in January to a Mar. 11 low of around $77,000. 

The drop has resulted in the loss of about 30% of Bitcoin’s (BTC) value and a significant decline of the broader cryptocurrency market. Over the past month, Ethereum (ETH) has fallen 29%, while Solana (SOL) and Dogecoin (DOGE) have had even more severe losses of 40% and 38%, respectively.

According to a Mar. 11 report by market intelligence platform Santiment, Bitcoin’s slump began after key stakeholders started taking profits in mid-February, triggering a wave of sell-offs.

From Feb. 20 to Mar. 8, 22,702 BTC (almost $1.8 billion at current rates) were moved from private wallets to exchanges. This trend implies that investors were getting ready to sell, which increased the downward pressure.

At the same time, whale accumulation, which had fueled Bitcoin’s rise following Trump’s election, slowed significantly after his inauguration. Institutional buyers who had aggressively purchased BTC between November and January began reducing their exposure in February. While some of these high-net-worth investors resumed buying on Mar. 3, the market has yet to see a significant rebound.

There has also been a significant change in investor sentiment. A growing number of bearish Bitcoin price projections can be seen in social media data, and many retail investors who entered the market late in 2024 sold at a loss. The average short-term loss for Bitcoin traders is currently -11%, according to Santiment’s study, while long-term holders have lost -5% in the last 12 months.

In addition to internal market factors, macroeconomic uncertainty has also weighed down on cryptocurrency. Investors are still alarmed by Trump’s new tariff policies and the possibility of a worsening trade war, which has caused more volatility for digital asset markets.

Although initial excitement was triggered by the administration’s pro-crypto stance, concerns over how fast policy and regulatory implementations can take place have dampened expectations.

Bitcoin is currently priced at about $77,200 as of Mar. 11, down 4% from the previous day. Meanwhile, Arthur Hayes, co-founder of BitMEX, believes that Bitcoin may fall to about $70,000, which would be a 36% correction from its peak and in line with previous bull market retracements.

He pointed out that monetary easing by central banks like the Federal Reserve, PBOC, ECB, and BOJ would probably come after a further drop in U.S. stock indexes, such as the S&P 500 and Nasdaq.

Many risk-averse investors could wait for central bank assistance to prevent extended sideways movement and unrealized losses. However, traders should consider buying the dip, according to Hayes. If the $78,000 support doesn’t hold, he previously predicted that Bitcoin may drop to $75,000.