Bitcoin has now fallen to $78,441 in early 2026, wiping out almost all the gains it made during the rally that started in the spring last year.
After a slow first half of 2025, Bitcoin rose sharply in the second half of the year, reaching an all-time high of $124,700 in October 2025.
However, the momentum did not last.
Over the past four months, Bitcoin has done that steadily decreasedand slides back to the same price level it last traded at in April 2025.
Factors responsible for this decline
At the top of the list is the appointment of Kevin Warsh as the next chairman of the Federal Reserve, which changed the way markets look at interest rates.
His hawkish stance has raised fears that interest rate cuts will slow or stop, strengthening the US dollar and reducing appetite for risky assets like Bitcoin.
At the same time, rising geopolitical and trade tensions have pushed investors into a defensive mode.
Another important factor is capital rotation.
Unlike previous cycles, Bitcoin failed to rise alongside gold and silver.
Furthermore, as prices began to fall, major liquidation events and complex leverage structures quickly unraveled.
What started as a gradual decline turned into a sharp sell-off, driven more by forced liquidations than investor panic.
At the same time, excitement around spot Bitcoin ETFs has waned, with large outflows as professional investors reduced risk.
Subsequently, expectations around broader government adoption, such as a strategic Bitcoin reserve in the US, have not yet translated into action, leading to disappointment-driven selling.
Circulating fears
Of course, this sharp price drop has mainly revived some of crypto’s oldest fears all around Satoshi Nakamoto.
Although Bitcoin’s creator has been silent for over 15 years, the belief that Satoshi still controls approximately 1.1 million BTC continues to weigh on market sentiment.
Some investors fear that even a small move in these coins could shake confidence and trigger a major sell-off.
However, not everyone agrees.
Kevin O’Leary dismisses these fears, arguing that the current volatility is simply a clearing phase before a much larger institutional wave enters the market.
In his recent interview he said added,
“Until Bitcoin becomes a regulated security through the Clarity Act and goes up to 150,000 or maybe 200,000, where you are agnostic about leasing the power to a hyperscaler for less than six cents per kilowatt hour or mining Bitcoin.”
Technical parameters
On the technical side, things still look tough.
Source: trading view
Indicators like the MACD remain bearish, showing the impact of Bitcoin’s four-month decline from its October peak.
That said, there is one positive sign, which is the The Relative Strength Index (RSI) has fallen into oversold territory.
In the past, this level often meant that selling pressure was running out.
When that happens, prices could rise sharply in the short term.
This suggests that the current level around $78,441 may provide stronger support than it appears.
Beyond graphs
Looking beyond the charts, market sentiment is holding up better than expected.
Bitcoins dominance also says At 59.82%, showing that capital remains in Bitcoin rather than flowing into smaller altcoins.
Therefore, Bitcoin is ultimately in a high-pressure holding phase.
The coming weeks will be critical in deciding whether fear will take over or a recovery will begin. For now, the market is feeling tense, and a rebound could come sooner than many expect.
Final thoughts
- This correction was less about price and more about credibility in a tightening global environment.
- Oversold technicals indicate that selling pressure is almost exhausted, even if confidence has not yet fully returned.