Bitcoin Falls Below $80K Amid Liquidity and Policy Fears
Weak risk appetite, thin trading volumes and Fed leadership change weigh on crypto markets.
Bitcoin slid to its lowest level since April 2025 on Sunday, falling below the $80,000 mark as investors reacted to liquidity fears, geopolitical tensions, and shifting US monetary policy expectations.
The world’s largest cryptocurrency was trading more than 6 per cent lower at $78,706.59 by 9:17am UAE time, extending its losing streak to a fourth consecutive monthly decline. The drop deepens a broader correction that has wiped more than 30 per cent off Bitcoin’s value since October.
Market pressure intensified following the nomination of former Federal Reserve governor Kevin Warsh as the next US Fed chair. Traders fear Warsh could favour tighter monetary policy for longer, potentially reducing market liquidity and dampening demand for risk assets such as cryptocurrencies. Bitcoin briefly touched $81,104 on Friday, its lowest level since November, after the nomination was announced.
Adding to market volatility, rising Middle East tensions and reports of an explosion at Iran’s Bandar Abbas port — a critical shipping hub near the Strait of Hormuz — triggered a broader risk-off sentiment. Investors have shifted toward traditional safe-haven assets such as gold and silver, putting further pressure on crypto markets.
“Bitcoin is behaving less like a political trade and more like a high-liquidity risk asset, responding primarily to dollar liquidity, interest-rate expectations and broader risk sentiment,” said Sam North, market analyst at eToro.
“With gold absorbing much of the safe-haven demand and equities continuing to attract growth capital, there has been little urgency to rotate meaningfully into Bitcoin, even against a friendlier regulatory backdrop,” he added.
Despite the current downturn, some analysts remain optimistic about Bitcoin’s longer-term outlook. Mohanad Yakout, senior market analyst at Scope Market, previously said the cryptocurrency could still outperform traditional indices as institutional adoption continues to grow.
Meanwhile, Carsten Menke, head of next-generation research at Julius Baer, noted that Bitcoin tends to benefit from periods of ample liquidity. “Bitcoin typically does well in times of ample liquidity,” he said.
North added that while near-term price action is being driven by macroeconomic conditions, Bitcoin’s long-term fundamentals remain supported by institutional participation and structural demand.
This article was previously published on UAE Moments. To see the original article, click here