Bitcoin nearly touched the $72,000 mark on Wednesday, marking the second straight day of its massive retreat this week.
The world’s oldest cryptocurrency sank as low as $72,096.20, plunging more than 5% on the day. It was last trading at $72,958.38, down about 4% on the day. Bitcoin is currently more than 40% off its record high of about $126,000 hit last October.
Bitcoin in the past day, per Coin Metrics
Bitcoin first broke below the $73,000 mark on Tuesday, hitting its lowest price in roughly 16 months and approaching its pre-election value. Analysts say $70,000 is a key level to watch as the digital asset’s downturn deepens, according to a Citi note to clients dated Tuesday.
The token’s value is bleeding as a result of several of geopolitical and economic challenges, among other headwinds.
Chief among them is investors’ recent rotation out of risk-on assets due to rising tensions between the U.S. and Europe over U.S. President Donald Trump‘s Greenland gambit and a recently ended partial government shutdown that delayed the release of some critical economic data. Also at play are expectations of a U.S. monetary policy shift following Trump’s nomination of Kevin Warsh for Fed chair late last month as well as a slowdown in efforts to create more crypto-friendly regulatory and legislative guardrails in the U.S.
Large institutional outflows driven by expectations of a deeper bitcoin correction has also thinned liquidity for the token, hurting its price, according to a recent analyst note from Deutsche Bank.
Spot bitcoin exchange-traded funds have seen significant outflows since a series of liquidations of highly leveraged digital asset positions last October, the analysts noted. The funds have recorded outflows of more than $3 billion in January, roughly $2 billion last December, and about $7 billion last November.
Bitcoin’s pullback hit several crypto stocks. Strategy, a bitcoin treasury firm, was also down 5% on the day, while digital asset mining names like Riot Platforms and MARA Holdings shed almost 11%.
Read More: Bitcoin bleeds for second straight day, nearly grazes $72,000
