Here’s what happened and what comes next

‘This is absolutely INSANE.”

While the comment came from a social media post, the painful knee-jerk reaction is likely reverberating across the board for anyone even remotely interested in crypto, as bitcoin just plunged to near $77,000 on Saturday and has held there since.

The price of the largest digital asset didn’t just stumble; it plunged through the $80,000 floor, hitting levels not seen since the “tariff tantrums” of April 2025.

By Saturday afternoon, in thin weekend liquidity, at just above $77,000, bitcoin had seen a staggering $800 billion in market value vanish since its October peak above $126,000, and about $2.5 billion in leveraged long positions liquidated in 24 hours.

The wipeout has even pushed bitcoin out of the global top 10 assets, where it had been for a long time, now trailing institutional heavyweights like Elon Musk’s Tesla and Saudi Aramco.

To say that this selloff has been painful would be putting it mildly, as social media is in full-blown panic mode, and wherever you look, there is blood on the street. And this is not just isolated to bitcoin; this week has been painful across all asset types, from tech stocks to precious metals.

If you’re wondering why the “digital gold” narrative has suddenly gone silent, here is the breakdown of the three-headed monster currently driving the market into a state of “Extreme Fear.”

1. Geopolitics rattles the ‘safety’ trade

The immediate spark on Saturday was a literal explosion. Reports of a potential sharp military escalation between the U.S. and Iran sent risk appetite into a deep freeze. In a repeat of a familiar script, traders didn’t treat bitcoin as a safe haven; they treated it as a liquidity source.

In times of war, investors typically engage in a “flight to safety,” moving capital into the U.S. Dollar. Because bitcoin is a 24/7 market, it often acts as the “first responder” to global panic. On Saturday, it served as the world’s ATM, being sold off to cover losses and find safety amid a thin, low-liquidity weekend.

Not to mention that liquidity, since the Oct. 10 crash (which has many pointing fingers at Binance), has never recovered, making market dynamics even more fragile heading into this weekend.

2. Gold and silver face a ‘hard money’ reset

Bitcoin wasn’t the only victim this week. The broader “store of value” trade came under siege. Gold plunged 9% in a single trading session on Friday to just under $4,900, while Silver suffered a historic 26% crash to $85.30.

In a bizarre twist, the traditional “safe havens” of gold and silver are being sold off alongside crypto. Analysts suggest that the massive rally in the U.S. Dollar — ignited by the nomination of Kevin Warsh to lead the Fed—has made these dollar-priced metals too expensive for international buyers, leading to a massive “de-risking” across all hard assets.

In early Sunday trade, both gold and silver are bouncing from that difficult Friday, up 1% and 3%, respectively. Currently, gold is trading near $4,730 and silver around $81.

3. The ‘liquidation trap’

The geopolitical shock hit a market already “bruised” by Washington’s shifting political landscape. As the price slipped, it triggered a massive mechanical breakdown in the markets.

According to data from Coinglass, over $850 million in bullish bets (long positions) were wiped out in a matter of hours on Saturday when prices started to crumble, eventually adding up to nearly $2.5 billion. These liquidations occur when traders borrow money to bet that the price will rise; once the price hits a certain “trap door,” exchanges automatically sell their holdings to repay the debt. This creates a “domino effect” — forced selling leads to lower prices, which trigger even more liquidations. Across the board, nearly 200,000 traders had their accounts “blown out” on Saturday.

4. Michael Saylor’s very bad day

To make matters worse, bitcoin’s price plummeted briefly below Michael Saylor’s Strategy (MSTR) average entry point of approximately $76,037, putting his massive bitcoin stack “underwater.” Panic set in that he might have to be forced to sell his stash, making the selloff even deadlier.

However, CoinDesk debunked that theory, explaining that Saylor won’t be forced to sell his bitcoin stash, given none of his coins are pledged as collateral. What it does mean, though, is that it will hinder his ability to raise cheap capital to buy more bitcoin in the open market.

Although Saylor later came out signaling that he would “buy the dip, the damage was done. The market realized that if a large corporation, such as Strategy, can’t raise more capital to buy bitcoin in the open market, the already fragile market will be left with no buyers, becoming vulnerable to forced liquidations and profit-taking.

Consequently, the sentiment has shifted from “moonshot” optimism to defensive hedging, as investors rush to buy price insurance in the options market against further slides toward $75,000.

5. Wall Street on edge: U.S. futures turn red

The contagion is already leaking into traditional finance.

While the New York Stock Exchange is closed for the weekend, U.S. Stock Futures, which opened for trade on Sunday evening (U.S. East Coast time), are lower across the board; the Nasdaq is down 1% and the S&P 500 is off 0.6%.

Get ready for a potential messy Monday!

6. Whales vs. the world: a tale of two investors

Perhaps the most telling part of this crash isn’t the price; it’s the wallet data.

According to Glassnode data, small investors are running. “Small Fish” (holders with less than 10 BTC) have been persistently selling bitcoin for over a month. They are capitulating, spooked by a 35% drop from the $126,000 all-time high.

Meanwhile, “mega-whales” (those holding 1,000+ BTC) have been quietly adding to their stacks. This cohort is now back at levels not seen since late 2024, effectively absorbing the coins that panicked retail traders are dumping. Although their buys weren’t significant enough to move the price upwards.

7. Bigger picture: The inevitable human greed

Now let’s zoom out and compare this weekend’s selloff and current market dynamics with those that played out before.

To be clear, this cycle is not all doom and gloom. The likes of BlackRock and JPMorgan of the traditional finance have been going all in on crypto through exchange-traded funds and stablecoins. Regulatory frameworks are being created around the world to make crypto more accessible and usable for the masses, and many legitimate crypto companies are trading publicly and turning into part of many fund managers’ “must-have” stock allocations. None of these were even remotely thinkable during previous cycles.

But the parallels between the last four months and the beginnings of the crypto winter in late 2021/early 2022 are perhaps growing, and while the names and methods may have changed, human behavior and the boom-bust nature of markets haven’t.

The likes of Three Arrows Capital, Do Kwon and TerraUSD, BlockFi, and Sam Bankman-Fried might have been replaced by the Trump family’s alleged naked profiteering, Michael Saylor’s massive buying and promises of an 11% risk-free rate in a world of 3% risk-free rates, and well-followed crypto Twitter personalities who teamed up with investment bankers to make a quick buck in digital asset treasury companies.

Just as in 2021, these new dynamics have probably created a speculative bubble that has likely collapsed in 2026. The only question now is how long and how deep the downturn will be.

While no one has fond memories of the 2022 crypto winter — with the price of bitcoin falling 80% — the timeline was relatively brief, roughly one year from the blowoff top to the bottom. From there, bitcoin quickly doubled in price, rose through 2023, and ultimately hit a new record in early 2024.

In theory, if there were another 80% decline from the October 2025 high of $126,000, bitcoin would be around $25,000. It’s a scary number to even think about, but it might be necessary to wipe out the worst of this past bull-market grift and clear the decks for another sustained run higher.

The denouement of the 2022 bear market came not far after the collapse of FTX and the arrest of its CEO, Sam Bankman-Fried. Whether bracelets will be necessary for any of this cycle’s bull market personalities remains to be seen.

“It’s only when the tide goes out that you discover who’s been swimming naked,” said Warren Buffett. The tide may not be fully out yet, but it surely feels like it’s headed that way.

Read more: How instant gratification is sucking the air out of the bitcoin market