Bitcoin Price Analysis: BTC’s Latest Drop Pushes Crypto Market Back Into The Doldrums
Bitcoin (BTC) slumped over 3% on Wednesday after failing to reclaim $70,000 as markets tried to digest expectations of a hawkish shift in the Federal Reserve’s macro outlook.
Analysts have flagged Kevin Warsh’s nomination as the next Fed Chair as a key reason for the market’s current price action. Traders expect tighter liquidity and fewer rate cuts under Warsh.
Bitcoin traded between $68,500 and $70,000 on Tuesday but lost momentum on Wednesday as markets reacted to expectations of a more hawkish macro outlook. As a result, the flagship cryptocurrency slumped below $67,000, down 3.51% over the past 24 hours.
Goldman Sachs Trims Bitcoin ETF Holdings By 40%
Goldman Sachs has significantly reduced its exposure to spot Bitcoin and Ethereum ETFs. According to a filing with the U.S. Securities and Exchange Commission (SEC), the investment bank reduced its spot Bitcoin ETF holdings by 39.4% in the fourth quarter. Goldman Sachs held 21.2 million shares across several spot Bitcoin ETFs as of December 31, 2025. According to its Form 13F, the combined value of the shares was around $1.06 billion. Additionally, Goldman Sachs held 40.7 million shares of spot Ethereum ETFs, valued at around $1 billion. The investment banking giant reduced its spot Ethereum ETF holdings by 27%, while adding positions in spot XRP and Solana ETFs.
Crypto, Banking Executives Still At An Impasse
US crypto and banking officials met at the White House to discuss the stablecoin yield deadlock. While the meeting ended at an impasse, officials described the talks as productive, but conceded that a satisfactory outcome remains elusive. The meeting is part of a series of closed-door discussions underway to resolve the deadlock between the crypto and banking industries over stablecoin yields.
Banks argue that allowing stablecoin yields would drain deposits from savings accounts, potentially causing liquidity issues. However, crypto firms argue that prohibiting stablecoin yields stifles innovation. Several key figures from the crypto and banking industries participated in the discussion. This included executives from Ripple, Coinbase, the Blockchain Association, and the Crypto Council for Innovation, representing the cryptocurrency ecosystem. Executives from banking institutions, including Citi, Goldman Sachs, JPMorgan Chase, and the American Bankers Association, represented banking interests.
According to a leaked document, banks took an inflexible stance on stablecoin yields during the meeting. The document revealed that banks laid out several “prohibition principles” on yield and interest, and called for a ban on any financial or non-financial benefits linked to holding, owning, or using stablecoins. They also called for the strict enforcement of anti-evasion measures and restrictions on marketing or representations implying yields represent deposits or insured interests. A source familiar with the meeting stated that crypto stakeholders pushed back strongly against the proposals.
It seemed like there was a pretty strong and negative reaction from the crypto side on a lot of them, particularly like anti-evasion and enforcement, and that kind of line of thinking.
Spot Bitcoin ETFs Extend Inflow Streak
Spot Bitcoin ETFs extended their inflow streak to offset last week’s outflows. According to CoinGlass data, the ETFs recorded $371 million in inflows on Friday, followed by $144 million on Monday and $166.5 million on Tuesday. The inflows have nearly offset last week’s $318 million in outflows after nearly three weeks of losses. Momentum has returned in recent sessions despite Bitcoin’s struggle to register a meaningful uptrend. The flagship cryptocurrency failed to reclaim the $70,000 mark on Tuesday. Renewed selling pressure has pushed the price below $67,000 during the ongoing session.
Bloomberg ETF analyst Eric Balchunas revealed on Tuesday that most Bitcoin ETF investors held their positions during the recent downturn. The analyst estimates only 6% of the total assets exited the funds despite Bitcoin’s sharp downturn.
Bitcoin (BTC) Price Analysis
Bitcoin (BTC) dropped sharply on Wednesday as investors came to terms with the harsh reality of a hawkish US macro outlook. The flagship cryptocurrency slumped below the $67,000 mark and remained down by over 3%, trading around $66,653.
Analysts attributed the downturn to shifting expectations around US macro policy. Markets have interpreted the nomination of Kevin Warsh as the next Federal Reserve chair as a hawkish signal, expecting tighter liquidity and fewer rate cuts in the months ahead. Andri Fauzan Adziima, research lead at Bitrue, stated that Bitcoin could stabilize between the $60,000 and $65,000 mark.
Traders now watch for stabilization around $60,000-$65,000 support or renewed macro easing to spark any rebound.
Vincent Liu, CIO of Kronos Research, stated that excess leverage has been flushed out of the market, and institutional capital is waiting for clearer signals before re-entering the market.
BTC and ETH dipped as exchanges saw deep deleveraging, with funding rates signaling most leveraged positions have been cleared.
Spot Bitcoin ETF inflows have also picked up, recording a third consecutive day of inflows on Tuesday with $166.6 million. Price action in recent sessions does not look too promising for Bitcoin, despite it starting the previous week in positive territory. Momentum couldn’t last, and the flagship cryptocurrency fell nearly 4% to $75,661 on Tuesday. Sellers retained control on Wednesday as the price fell 3.52% to $72,998. Selling pressure intensified on Thursday as BTC slipped below $70,000, falling nearly 14% to $62,791.
Source: TradingView
Selling pressure initially intensified on Friday as BTC fell to a low of $60,000. However, dip buyers entered the fray, and the price rose over 12% to reclaim $70,000 and settle at $70,527. Price action was mixed over the weekend as BTC fell 1.82% on Saturday before rallying to an intraday high of $72,232 on Sunday. It ultimately settled around $70,279, up 1.49%. Selling pressure and volatility returned on Monday, with the price registering a marginal decline. Sellers retained control on Tuesday as BTC fell 1.85%, slipping back below $70,000 to $68,803. BTC is down over 3% during the ongoing session, trading around $66,484 after failing to reclaim the $70,000 mark.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.