Bitcoin Reclaims $65,000 as Tech Sell-Off Eases, but Weekly Losses Still Loom Large

BY COMFORT OGBONNA

Bitcoin climbed back above the $65,000 mark on Friday, showing tentative signs of stabilization after a brutal sell-off across global technology stocks wiped out many high-risk positions in recent sessions. The rebound came as pressure on risk assets appeared to ease slightly, offering some relief to cryptocurrency markets that have been under sustained strain for weeks.

Despite the bounce, bitcoin remained on course for its worst weekly performance since late 2022. The digital asset sector has struggled for months following a sharp downturn last October, when a steep market crash sent bitcoin tumbling from record highs and triggered a broad cooling in investor appetite for cryptocurrencies. That shift in sentiment has persisted, with rallies proving short-lived amid concerns over leverage, liquidity and broader market volatility.

The world’s largest cryptocurrency was last trading up 4.4% at $65,894.20, recovering from earlier losses after sliding as much as 5% to a session low of $60,008.52. Even with Friday’s gains, bitcoin has lost nearly 14% so far this week, marking its steepest weekly decline since November 2022. Prices are still hovering near their weakest levels since early October 2024, just before a sharp rally gathered pace as Donald Trump moved closer to winning the U.S. presidential election, having publicly signaled support for digital assets during his campaign.

Market participants have debated whether bitcoin’s prolonged decline since October reflects deeper warning signs or is simply part of a broader correction in risk-heavy markets. Chris Weston, head of research at brokerage Pepperstone in Melbourne, said the rapid sell-off suggests crowded trades are being unwound at speed, as investors rush to reduce exposure amid rising uncertainty. He noted that many large positions built during the rally are now being exited almost simultaneously, amplifying volatility.

Ether, the second-largest cryptocurrency, also staged a rebound, rising about 4% to $1,921 after earlier slipping to a near 10-month low of $1,751.94. Even so, it was heading for a weekly decline of nearly 16% and a year-to-date loss of around 35%, underscoring the depth of the downturn across the broader crypto market.

The scale of losses has been significant. Data from CoinGecko showed the total global cryptocurrency market has shed roughly $2 trillion in value since peaking at $4.379 trillion in early October, with more than $1 trillion erased in the past month alone. The slide has coincided with renewed selling pressure in other asset classes, including precious metals and equities, as leveraged trades and speculative flows increased volatility in markets traditionally viewed as safer havens.

Bitcoin’s price movements have been closely linked to the technology sector in recent years, particularly during periods of strong investor enthusiasm for artificial intelligence and other growth themes. As tech stocks faltered, cryptocurrencies followed suit, reinforcing their status as high-beta risk assets rather than defensive alternatives.

Joshua Chu, co-chair of the Hong Kong Web3 Association, said bitcoin’s retreat toward $60,000 does not signal the end of crypto, but rather reflects a painful adjustment after excessive risk-taking. He argued that investors who treated bitcoin as a one-way trade without proper risk controls are now confronting the realities of market volatility, similar to sharp corrections recently seen in gold and silver when leverage outpaced fundamentals.

Adding to the pressure, analysts at Deutsche Bank noted that U.S. spot bitcoin exchange-traded funds experienced outflows exceeding $3 billion in January, following withdrawals of about $2 billion in December and $7 billion in November. The sustained outflows suggest institutional investors have been trimming exposure as sentiment deteriorates.

Looking ahead, market watchers remain cautious. XTB research director Kathleen Brooks said February has so far been difficult for stock market bulls, and it remains to be seen whether bitcoin’s recovery above $65,000 marks the start of a more durable rebound or merely a pause before further weakness. For now, investors appear focused on managing risk rather than chasing upside, as volatility continues to dominate global markets.