Key Highlights
- Bitcoin’s value decreased by 17.3% while Ethereum plummeted 22% during the week — marking the most severe weekly decline since November 2022’s FTX implosion
- Digital asset markets saw approximately $390 billion evaporate, bringing total market capitalization barely above the $2 trillion threshold
- Liquidations reached nearly $7 billion across leveraged positions, with bullish long positions accounting for $5.7 billion of losses
- For the first time in almost four years, Strategy divested bitcoin holdings, creating investor unease as exchange-traded fund withdrawals persisted
- Public sentiment reached multi-month lows of pessimism, yet institutional engagement continued advancing — evidenced by $20 billion in tokenized real-world assets
The cryptocurrency sector endured one of its most punishing weeks in recent memory. Bitcoin’s value contracted by 17.3% while Ethereum experienced a 22% decline, representing the most dramatic weekly losses witnessed since November 2022’s FTX exchange meltdown.
The aggregate cryptocurrency market shed approximately $390 billion in valuation. This collapse brought the total market capitalization to just over $2 trillion, representing a significant contraction from October’s peak of nearly $4.2 trillion, based on TradingView analytics.
Traders using leverage faced devastating consequences. Approximately $7 billion worth of positions were forcibly liquidated throughout the cryptocurrency markets during this turbulent period, data from CoinGlass reveals. The overwhelming majority — roughly $5.7 billion — consisted of long positions, indicating traders who had wagered on price appreciation.
Catalysts Behind the Market Collapse
Multiple negative factors converged simultaneously. Strategy, which holds the largest corporate bitcoin reserve, announced it had divested 32 BTC valued at approximately $2.5 million. This represented the company’s initial bitcoin sale in almost four years.
While the transaction size was modest, it disturbed investors who had viewed Strategy as a consistent demand driver. Additionally, speculation emerged regarding whether the company might liquidate additional bitcoin holdings to satisfy obligations related to its preferred equity commitments.
Bitcoin exchange-traded funds continued experiencing withdrawals. According to K33 Research head Vetle Lunde, portions of these outflows represented capital rotation away from cryptocurrency into artificial intelligence investments.
With AI-focused equities reaching unprecedented valuations and market participants anticipating potential public offerings from entities including OpenAI, Anthropic, and SpaceX, maintaining bitcoin exposure became increasingly difficult to rationalize for certain investors.
Zcash suffered a devastating 40% decline after researchers employed artificial intelligence to uncover a severe vulnerability within its privacy infrastructure.
Employment Data Intensified Selling Pressure
Friday’s unexpectedly robust U.S. jobs report exacerbated the situation. Financial markets that had anticipated interest rate reductions now contemplate the possibility that the Federal Reserve might implement rate increases instead.
U.S. Treasury yields jumped sharply. The Nasdaq 100 recorded its most severe single-day decline since April 2025’s tariff-induced market rout.
By Saturday, valuations had achieved modest stabilization, though both bitcoin and ethereum remained near their recent lows — BTC hovering just above $60,000 while ETH traded around $1,550.
Public Sentiment Versus Institutional Participation
Cryptocurrency social sentiment reached its bleakest reading since mid-February, according to Santiment analytics. Terms including “dead,” “finished,” and “over” appeared with greater frequency alongside bitcoin and cryptocurrency conversations than any time in recent months.
Historically, such pervasive negativity has emerged near market troughs. A comparable sentiment spike in February preceded a market recovery.
Yet beyond social media pessimism, institutional participation persisted. Tokenized real-world assets surpassed $20 billion in cumulative on-chain value during the same period. JPMorgan executed live Treasury trades on blockchain infrastructure, while exchange platform Bullish finalized a $4.2 billion acquisition.
Whether this week’s losses represent a cyclical bottom or merely another phase in a prolonged downturn remains uncertain. Concerns about potential rate increases, competition from artificial intelligence investments, and broader macroeconomic uncertainty continue influencing market dynamics.
