Over the past 24 hours, a historic drawdown across asset classes has been partially reversed. Gold, silver and equities have recovered, while bitcoin still trades near this week’s lows.
Taken together, this provides a sobering reminder of how bitcoin actually behaves when it slams in the traditional markets
On Thursday evening European time, while the US market session was ongoing, a powerful risk-off‑shock was triggered in which gold, silver, US equity indices and bitcoin fell simultaneously, and an estimated $5.4 trillion in aggregate market value temporarily disappeared. In a matter of hours, traditional markets brought in about $3.6 trillion, driven by driven by buying interest from institutional investors and high liquidity in commodities and stocks. Bitcoin, on the other hand, has not had a similar recoil, and at opening in the Nordic region and Europe is still near the lower end of the week's trading range - marked by heavy forced liquidations and cautious buyers.
Over the past 24 hours, bitcoin has gone from relatively calm trading to one of the heaviest single days so far this year. According to DL News, the price fell more than 6 percent in 24 hours, and was in the negative on both a weekly and annual basis. Ethereum fell over 7 percent in the same period, and larger tokens such as XRP and Solana had similar daily percentage drops. Taken together, this indicated a broad movement away from risk positions in liquid crypto assets. On Friday morning (European time), bitcoin is moving around 82.-83,000 USD.
The price drop of bitcoin and crypto coincided with declines in major US tech companies after Microsoft posted results with record-high investments in artificial intelligence. This has raised concerns that AI investment is growing faster than visible revenues. For investors who have treated bitcoin as an extension of a “long tech + AI” position, these numbers and the reaction in tech became a new reason to mitigate risk in an already vulnerable market.
The shock across asset classes did not start in the crypto market. The ongoing coverage from crypto medium Coindesk shows that bitcoin's fall towards $81,000 came on a day described as “horrendous” for the markets. Today, traders reacted to signals that President Donald Trump will nominate former Fed board member Kevin Warsh as the new central bank chief and replace Jerome Powell. This has forced investors globally to rethink the path of interest rates in the US and how much inflation and market volatility the US central bank will accept going forward. In particular, it affects assets that have been priced on expectations of stable or supportive monetary policy
Beneath the surface, it is the derivatives market in particular, which explains how fierce the movement in crypto has been. A CoinDesk article estimates that around $1.7 billion in bullish crypto positions were liquidated over the course of about a day, mainly long futures contracts that were positioned for further upside. A wave of forced liquidations ensued as margin requirements and risk systems kicked in throughout Thursday's US‑session. When key technical levels slip in a market with thin order books, this kind of mechanical selling helps accelerate the fall and push prices down further than the macro news in isolation would suggest.
At the same time, the options market made an abrupt turnaround in its view of future volatility. Earlier in January, implied volatility in bitcoin options had fallen to relatively low levels, but it skyrocketed after the drop and movement down towards $80—81,000. For spot‑oriented investors, the change in the options curve is an additional signal that the market is about to enter a more troubled phase, where positioning and liquidity can trigger abrupt movements even without new crypto-specific news.
Seen during one, the past 24 hours provide a sobering reminder of how bitcoin actually behaves when it slams in the traditional markets. On the one hand, parts of the environment still refer to BTC as “the world's hardest money” and a hedge against monetary policy turmoil. On the other hand, the trading pattern shows that most players still treat bitcoin as a high-risk component of the broad risk universe, closely tied to US tech companies and the AI narrative. The historic drop across asset classes illustrated that when macro uncertainty increases, Fed policy is in play and Big Tech disappoints, bitcoin is sold alongside other risky assets — not in place of them.
