Bitcoin steadied near $78,000 on Monday following a sharp weekend sell-off, but market strategists continue to warn that the recent pause may offer little reassurance to investors expecting a sustained rebound. While prices have stabilized in the short term, sentiment across the crypto market remains fragile, with technical indicators and positioning data suggesting the broader downtrend is still intact.
The world’s largest cryptocurrency fell sharply over the weekend, briefly touching its lowest level since April of last year and extending its losing streak to a fourth consecutive month. Bitcoin is now down more than 12% year to date after a disappointing 2025 that eroded confidence among both retail and institutional investors. Ether has fared even worse, plunging roughly 23% since the start of the year. In aggregate, the crypto market has shed an estimated $1.7 trillion in value, or nearly 40% from its peak last year, according to industry data.
The latest leg lower coincided with a broader risk-off move across global markets. On Friday, President Trump announced his intention to nominate Kevin Warsh as the next chair of the Federal Reserve when Jerome Powell’s term ends in May. Markets largely view Warsh as hawkish, reinforcing expectations that monetary policy could remain restrictive for longer than previously anticipated. That shift weighed on assets sensitive to liquidity conditions, including cryptocurrencies, precious metals, and other speculative investments.
Gold and industrial metals also sold off sharply, underscoring a broader retreat from inflation hedges and high-volatility assets. For crypto markets, which have historically thrived in periods of abundant liquidity, the evolving rate outlook continues to act as a meaningful headwind.
Strategists at 10X Research noted that flow and positioning data indicate investors are not yet prepared to buy the dip. Instead of rotating capital back into risk assets, traders appear focused on deleveraging and unwinding existing positions. That behavior typically reflects caution rather than capitulation and suggests the market may require more time before establishing a durable bottom.
While sentiment and technical indicators are approaching historically oversold levels, analysts caution that such conditions alone are not sufficient to trigger a sustained rally. In the absence of a clear catalyst — such as a shift in Federal Reserve policy or a resurgence in risk appetite — there is little urgency for sidelined capital to re-enter the market. Bitcoin’s next key support level sits near $73,000, an area closely watched by traders if selling pressure resumes.
Not all strategists are uniformly bearish. Fundstrat’s head of digital assets, Sean Farrell, pointed to the mid-$70,000 range as a logical technical support zone, noting that it previously served as both resistance and support during major market inflection points in 2024 and 2025. Farrell suggested that the recent pullback and signs of capitulation could create a more attractive near-term risk-reward setup, though he emphasized that any allocation should remain modest.
For now, Bitcoin’s ability to hold near $78,000 may slow the pace of declines, but it has yet to signal a meaningful trend reversal. Until macro conditions improve or a decisive catalyst emerges, volatility and downside risk remain central features of the crypto landscape.