Bitcoin drops below 365-day moving average for first time since 2022

Bitcoin fell below $70,500 on Thursday, breaking beneath its 365-day moving average for the first time since the 2022 bear market as more than $2.5 billion in leveraged positions were liquidated across crypto exchanges.

The 20% decline since the start of 2026 has erased $650 billion in combined crypto market value and pushed major altcoins including Ethereum, Solana, and XRP into double-digit losses, with investors citing reversed ETF flows and tightening monetary policy expectations as key catalysts.

Market overview: Bitcoin slide accelerates

Bitcoin’s price has declined more than 7% this week and roughly 20% so far in 2026, while other major assets such as Ether and XRP also suffered notable losses.

Crypto traders and investors have reacted to this slide with heightened caution as risk sentiment deteriorates and liquidity shrinks across spot and derivatives markets.

According to industry data, over $2.5 billion in leveraged Bitcoin positions were liquidated during recent volatility, one of the largest single-day liquidation events in recent memory that continues to pressure prices.

“It’s clear that sentiment has shifted dramatically. The technical breakdown below key support levels has accelerated selling and shaken confidence.”

Erik Norland, chief economist at the CME Group, said that forced liquidations and weakening demand are compressing prices.

Technical signals and structural weakness

Analysts point to a series of bearish technical indicators underpinning the recent slump.

Bitcoin has fallen below its 365-day moving average, a long-term trend measure that has not been breached since 2022.

On-chain metrics also paint a grim picture: liquidity indicators such as stablecoin reserves have contracted, and institutional flows have turned from net buyers to net sellers.

CryptoQuant research notes that spot ETF demand reversed in early 2026, creating a significant demand gap compared to the prior year.

“Without robust institutional support, the market is more vulnerable to downside pressure. This shift in flow dynamics is one reason we’re seeing persistent selling rather than stabilization.”

Matt Hougan, chief investment officer at Bitwise Asset Management, said.

Alongside Bitcoin, many major altcoins experienced steep declines, with Ethereum briefly falling under key levels near $2,000 and assets like Solana, BNB, and Cardano registering double-digit losses.

Macroeconomic headwinds and sentiment

Beyond market mechanics, macroeconomic developments have weighed heavily on crypto sentiment, creating room for doubts from top investors and newbies.

Global risk-off conditions, driven by expectations of tighter monetary policy and elevated geopolitical tensions, have pushed investors away from risk assets, including digital tokens.

The nomination of Kevin Warsh as the next U.S. Federal Reserve Chair has been cited by market watchers as a catalyst for sentiment shifts.

Warsh’s perceived support for reducing the Fed’s balance sheet, potentially curbing systemic liquidity, has intensified concerns that the supportive monetary backdrop that benefited high-beta assets like crypto may be waning.

Additionally, risk-off sentiment across equities, commodities, and cryptocurrencies has magnified volatility.

Precious metals such as gold and silver, which once moved in tandem with risk assets, have also faced downward pressure, further complicating market narratives.

Investor fears and future scenarios

As losses mount, caution among market participants has given way to more bearish projections.

Veteran investor Michael Burry, known for his prescient calls in traditional markets, recently warned that continued declines below $70,000 could trigger sickening scenarios, including multi-billion-dollar losses for major holders.

Despite these concerns, some industry participants argue that the downturn may prime conditions for eventual stabilization, especially if liquidity returns or regulatory clarity improves.

However, for the general public and investors alike, the immediate outlook remains defined by volatility, weak demand, and persistent downward pressure.

As markets continue to digest these developments, all eyes will be on whether Bitcoin holds the $70,000 threshold, a key psychological and technical level, or slides further into untested territory.