Bitcoin fell below US$60,000 on Friday, extending a sharp sell-off that has erased much of the cryptocurrency’s post-election rally and pushing prices to their lowest level since Donald Trump’s victory in the 2024 US presidential election.
The world’s largest cryptocurrency dropped around 6% during the session, taking its losses over the past week to 17% as investors continued to retreat from risk assets.
The decline leaves Bitcoin trading at its weakest level since October 2024, before Trump’s election win helped ignite one of the strongest rallies in the cryptocurrency’s history.
Following the election, optimism surrounding a more crypto-friendly regulatory environment and broader institutional adoption drove Bitcoin to record highs above US$122,000, more than doubling from pre-election levels.
However, sentiment has shifted dramatically in recent weeks as investors reassess the outlook for interest rates and global liquidity. Stronger-than-expected economic data has fuelled expectations that the US Federal Reserve may maintain higher interest rates for longer, reducing the appeal of speculative assets such as cryptocurrencies.
The sell-off reflects a broader move away from risk-sensitive investments, with technology stocks, artificial intelligence-related companies and digital assets all coming under pressure as investors reposition portfolios in anticipation of tighter monetary conditions.
Higher interest rates tend to reduce liquidity across financial markets and increase the attractiveness of lower-risk investments, creating a challenging environment for assets that rely heavily on investor appetite for growth and speculation.
Despite the recent weakness, Bitcoin remains substantially above levels seen before the 2024 election and continues to attract significant institutional participation. However, the latest correction highlights the cryptocurrency market’s ongoing sensitivity to macroeconomic developments and central bank policy expectations.
Market participants will now be closely watching upcoming Federal Reserve commentary and inflation data for clues on the future direction of US monetary policy, which remains a key driver of sentiment across both cryptocurrency and broader financial markets.
