Bitcoin extended its decline on Saturday, falling more than 6% to drop below the key $80,000 level. The world’s leading cryptocurrency was trading at $78,719.63 in afternoon trading, continuing a slide that began the previous session.
The downturn follows Friday’s drop to $81,104—Bitcoin’s lowest price since late November. The sell-off coincided with a strengthening U.S. dollar after former Federal Reserve Governor Kevin Warsh was selected as the next Federal Reserve Chair. Investors are concerned that Warsh, who has publicly called for a “regime change” at the central bank and a reduction of its balance sheet, may move to drain liquidity from the financial system.
Cryptocurrencies have broadly been seen as beneficiaries of ample liquidity, often rallying when the Fed injects cash into markets—a dynamic that supports speculative assets. Brian Jacobsen, Chief Economist at Annex Wealth Management, noted that the Fed’s “bloated balance sheet combined with heavy-handed bank regulation” has trapped liquidity on Wall Street, fueling bubbles in assets like crypto, bonds, and meme stocks.
The liquidity worries sparked a broader crypto retreat. Ether, the second-largest digital asset, tumbled nearly 12% to $2,387.77. The sector has struggled for direction since last year’s downturn, failing to participate in the major rallies seen in gold and equities.
“Sometimes these price adjustments feed on themselves,” Jacobsen observed, suggesting that Friday’s sharp drop served as a risk reminder to the market. He added that it is “possible, if not likely, that we see more selling over the next few days.”
The weakness marks a challenging period for cryptocurrencies, which had anticipated a supportive regulatory environment and increased capital flows under President Donald Trump. Despite those hopes, market-leading Bitcoin has now lost roughly a third of its value since hitting record highs last October.
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