Bitcoin crashes to $58,000 in sharp selloff as price nears two-year low

Just two weeks after Bitcoin fell to $59,000 in its worst weekly stretch since 2022, the world’s largest cryptocurrency is back under pressure. On Thursday morning, Bitcoin plunged as much as 5% to roughly $58,000, its weakest level since 2024, before clawing back some of those losses to trade near $59,300 by mid-morning.

The latest drop adds to what has become a punishing slide for crypto markets. Bitcoin is now down more than 53% from its October 6, 2025 all-time high of $126,198, and the broader market is falling with it. Ether sank to around $1,550, down about 5.5% on the day, with Solana and Dogecoin posting similar losses as risk appetite across crypto continued to fade.

The selloff came fast. Bitcoin had climbed as high as $61,868 in the early hours of Thursday before sellers took control and pushed the price sharply lower in a matter of minutes. That move followed an already rough 24 hours in which Bitcoin briefly traded below $60,000 and slipped through a closely watched support zone tied to the Bitcoin Power Law, a long-term valuation model popularized by physicist Giovanni Santostasi.

For years, the model has been one of the more widely followed frameworks in crypto circles. It maps Bitcoin’s price against time on a logarithmic scale and, until this week, had managed to contain every major cycle, crash, and recovery in Bitcoin’s history. Traders have watched Bitcoin brush against the lower edge of that support band during periods of extreme stress, including the March 2020 Covid crash and the collapse of FTX in 2022. A sustained move below it, though, had never been recorded.

That changed this week.

The Power Law support trendline had been sitting in the low $60,000 range. Bitcoin’s drop into the $58,000s pushed it clearly below that floor, marking what many analysts see as the first real break in the model’s history. Bitcoin has since pared some losses and was recently trading around $59,220. Whether the move turns out to be a temporary washout or a more serious structural breakdown remains an open question. What is clear is that the breach comes at a time when confidence in the crypto market is already under strain.

The pressure has been building for weeks. Spot Bitcoin ETFs have recorded billions of dollars in outflows. Strategy’s decision to sell Bitcoin for the first time in four years rattled sentiment across the institutional market. At the same time, rising geopolitical tensions between the U.S. and Iran have pushed oil prices higher and revived inflation fears, complicating the outlook for monetary policy.

Bitcoin Slides to $58K as Bear Market Deepens, but Crowded Shorts Point to Possible Snapback

Markets are now contending with a much more hawkish Federal Reserve than many expected. Investors are still digesting last week’s policy signals under new Fed Chair Kevin Warsh, with officials indicating that the next move is likely to be a rate hike rather than a cut. That shift has weighed on speculative assets across the board, including crypto, at a moment when capital is already rotating into AI-related equities and away from digital assets.

The contrast was visible in Thursday’s broader market action. Micron shares jumped after strong earnings, helped by continued demand tied to the AI buildout, even as much of the rest of big tech traded lower and the Nasdaq slipped. For crypto bulls, it was another reminder that the market’s attention has moved elsewhere.

Still, beneath the damage, derivatives data suggests the current move may be setting up a different kind of risk: a short squeeze.

“The liquidation heatmap shows a bulk of clustered liquidation risk above current prices, not below. That means that a move to the downside is unlikely to be amplified by a cascade of forced selling; the real danger is for those positioned short,” CoinDesk wrote.

Bitcoin remains in a clear downtrend, but the positioning in futures markets has become heavily skewed toward further downside. Open interest has ticked higher over the past 24 hours even as price has fallen, a sign that traders are adding fresh short bets rather than stepping aside. Funding rates have turned negative too, showing that traders are paying up to hold bearish positions.

The liquidation setup points in the same direction. Data from liquidation heatmaps shows a larger cluster of forced-liquidation risk sitting above current prices than below them. In simple terms, that means a move higher could trigger a chain reaction as short sellers rush to close positions, buy back Bitcoin, and avoid liquidation. A further move down, by contrast, appears less likely to spark the same kind of forced selling cascade.

Spot order-book data tells a similar story. CoinGlass data shows roughly 6,900 BTC in bids sitting between current levels and $50,000, compared with only about 1,570 BTC in resting sell orders between current prices and $70,000. That imbalance does not guarantee a reversal, but it does suggest that downside liquidity is deeper than the market’s surface panic might imply.

That leaves Bitcoin at a fragile but important moment. Bears still have control of the trend, and a break below $58,000 would deepen the sense that the market is entering a new phase of weakness. At the same time, the trade is getting crowded. If buyers manage to reclaim momentum and push price back through nearby resistance, the same traders betting on another leg down could end up fueling a sharp rebound.

For now, Bitcoin is caught between two forces: a macro backdrop that keeps getting worse for risk assets, and a derivatives market that may be leaning too hard in one direction. That tension could define the next move.