Bitcoin Plunges Below $79,000: Why Are BTC, ETH, XRP Going Down?

Bitcoin BTC/USD has fallen below $79,000 on Monday, raising concerns among analysts who believe the downturn may not be over.

With XRP XRP/USD, Ethereum ETH/USD and other altcoins also under pressure, experts suggest that market expectations have been reset, and further corrections remain a possibility.

What Happened: Bitcoin is currently trading at $78,650, down 4.5% in the past 24 hours, while Ethereum has dropped 4.7% to $1,925.

Among major altcoins, XRP and BNB BNB/USD have declined 2% each, Solana SOL/USD has fallen 6%, and Dogecoin DOGE/USD is down 5%.

The crypto market has seen $637.35 million in liquidations over the past day, with long positions accounting for $460.19 million, according to data from Coinglass.

The decline follows Bitcoin's peak at $109,000 in January, marking a nearly 25% drop that has erased most of its previous gains.

What Experts Are Saying: According to James Toledano, Chief Operating Officer of Unity Wallet, the pullback is largely due to unrealistic expectations surrounding the strategic Bitcoin reserve.

"The biggest letdown has been the U.S. Bitcoin Strategic Reserve, which turned out to be nothing more than a repackaging of seized FBI assets—around 200,000 BTC, just 1% of Bitcoin's market cap—placed under the control of the Federal Reserve," Toledano told Benzinga.

Macroeconomic factors are also weighing on the market.

Rising inflation, shifting Federal Reserve policy expectations, and the recent U.S. tariff policy have prompted institutional investors to reduce exposure to risk assets.

Toledano noted that the U.S. economy has contracted by 2.5% following tariff implementation, adding to concerns of an economic slowdown.

Despite the current downturn, some analysts argue that crypto remains in a long-term growth phase.

Speaking with Benzinga, Marcin Kazmierczak, Co-founder and COO of RedStone, said he believes institutional interest remains strong but acknowledges that regulatory changes take time to impact prices.

"Fundamentals for crypto are strong: incoming U.S. reserves, new applications in DeFi, both stablecoins and RWAs are at all-time highs," Kazmierczak said. "Legislation and the Strategic Bitcoin Reserve need time to be properly implemented and reflected in the market."

The lack of immediate clarity from the White House Crypto Summit has also contributed to market hesitation.

Also Read: Why Did Trump’s Strategic Crypto Reserve Not Include XRP?

Feng He, CEO of Deeplink, told Benzinga that traders were expecting the event to provide a positive catalyst, but instead, uncertainty has persisted.

"The ambiguity stemming from the White House Crypto Summit has undercut market momentum, and traders were hoping this would be a catalyst for positive price action," Feng said. "While it's difficult to predict the exact bottom, I’m sure many BTC maxis will seize the opportunity to buy BTC under $80,000, but further corrections could occur if investor sentiment weakens."

While some investors are buying the dip, experts warn that Bitcoin's price could see further downside if macroeconomic concerns persist.

The absence of strong buying pressure following the Strategic Bitcoin Reserve announcement suggests that investors remain cautious.

Feng He believes any potential rebound will be slow to develop.

"While the Strategic Bitcoin Reserve has received mixed reviews, any positive price impact will likely materialize gradually over the coming months as opposed to an immediate return to the $100,000 level for BTC," he said.

What’s Next: With Bitcoin struggling to find support and altcoins facing selling pressure, analysts are watching for signs of stabilization. Until economic conditions improve or regulatory clarity is established, further volatility remains likely.

Aurelie Barthere, Principal Research Analyst at Nansen told Benzinga that alts have broken key supports, and it is hard to estimate the next-level and that this is a macro correction.

“Next level will be $71,000 to $72,000, top of the pre-election trading range. We are still in a correction within a bull market: stocks and crypto have realized and are pricing; a period of tariff uncertainty and fiscal cuts, no Fed put. Recession fears are popping up,” Barthere said.

She stressed that there is no hint of a recession yet and that relief could come by April after the implementation of the next round of tariffs.

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