Bitcoin Crashes Below $70K as Trump Rally Completely Erased

$15 billion. That's how much Bitcoin ETF holders are sitting on in unrealized losses right now. The digital asset that was hailed as "digital gold" just months ago has delivered a brutal reality check, crashing near $60,000 before clawing back to around $69,000.

The Complete Trump Rally Wipeout

Bitcoin has now given back essentially all the gains it made after Donald Trump's election victory in November 2024, when it soared to an all-time high above $125,000. The cryptocurrency that once seemed unstoppable has proven painfully mortal.

The broader crypto carnage was even worse. The CoinDesk 20 index plummeted over 17% in just one week, while major altcoins suffered deeper wounds. Ethereum dropped 22.4%, Binance Coin fell 23.4%, and Solana crashed 25.2%.

Wintermute's Jasper De Maere called it the "worst single-day drawdown in bitcoin since the FTX collapse," describing the action as feeling "like a 'sell at any price' working order." The violence of the move caught even seasoned traders off guard.

Market Structure Cracks Under Pressure

This wasn't just a price correction—it exposed fundamental weaknesses in crypto's market structure. Bitcoin's average 1% market depth has shrunk from over $8 million in 2025 to around $5 million now, according to Kaiko research. Translation: it takes less money to move prices dramatically.

Institutional desks reported "small but manageable liquidation," yet this couldn't fully explain the magnitude of the crash. The mystery of where the real stress sat in the system has fueled debate about crypto's true liquidity.

Meanwhile, spot Bitcoin ETF flows have turned decidedly negative, with $1.25 billion in net outflows over three days. Bianco Research's Jim Bianco estimates the average ETF cost basis sits near $90,000, leaving holders nursing roughly $15 billion in paper losses.

The AI Fear Factor

What makes this crash particularly intriguing is its correlation with software stocks. When Anthropic unveiled new automation tools targeting legal and knowledge-based workflows, software giants tumbled. Salesforce dropped 8%, Adobe fell 9%, and ServiceNow crashed 13% over the week.

BTIG's Jonathan Krinsky noted Bitcoin's recent correlation with software stocks, suggesting both may have "put in tactical lows." If Bitcoin truly is "programmable money," as Bianco observed, perhaps it should trade like software after all.

The options market told its own story of fear. Implied volatility jumped to the 99th percentile, with traders rushing to buy put protection—especially in Ethereum, which became the "epicenter of the pain." The skew toward expensive downside protection signals expectations of continued turbulence.

Industry Restructuring Adds to Gloom

Crypto exchange Gemini piled onto the negative sentiment by announcing plans to shutter operations in the UK, EU, and Australia while cutting 25% of staff. Users in affected regions will enter withdrawal-only mode, with asset transfers facilitated through a partnership with eToro.

The move reflects the harsh realities facing crypto businesses in an increasingly challenging regulatory environment. Meanwhile, Bitfarms saw its shares rise after ditching its "bitcoin company" identity to focus on AI infrastructure—a telling sign of where survival instincts are leading.

The answer may determine whether this crash represents a healthy correction or the beginning of a longer reckoning.