Bitcoin and Ethereum Suffer Biggest Weekly Drop Since 2022 as Crypto Market Loses $390 Billion

Crypto markets experienced one of their worst weeks in recent years, with Bitcoin and Ethereum posting their steepest weekly losses since the market turmoil of November 2022. Bitcoin fell 17.3% during the week, while Ethereum dropped 22%, leaving both assets near multi-year lows.

By the weekend, Bitcoin was trading slightly above $61,000, while Ethereum hovered around $1,550. The broader digital asset market lost approximately $390 billion in value, reducing total crypto market capitalization to just over $2 trillion.

Billions Wiped Out in Liquidations

The market downturn triggered massive liquidations across crypto derivatives markets. Data showed nearly $7 billion in leveraged positions were wiped out during the week, with around $5.7 billion coming from long positions as traders betting on higher prices were forced to exit.

Several Factors Drove the Selloff

The decline was fueled by multiple developments. Early in the week, Strategy, the largest corporate Bitcoin holder, disclosed the sale of 32 BTC worth roughly $2.5 million. Although the amount was small, it raised concerns among investors about potential future sales.

At the same time, Bitcoin exchange-traded funds continued to see significant outflows. Some analysts suggested that investors are increasingly shifting capital toward artificial intelligence-related opportunities, including fast-growing technology companies and anticipated public offerings.

Economic Concerns Add Pressure

Market sentiment weakened further after a stronger-than-expected U.S. jobs report increased concerns that the Federal Reserve could maintain higher interest rates or even consider additional rate hikes if inflation remains elevated. Rising Treasury yields and weakness in technology stocks added further pressure to risk assets, including cryptocurrencies.

Another setback came after researchers used an advanced AI model to identify a critical vulnerability in Zcash’s privacy system, causing the cryptocurrency to fall more than 40%.

Recovery Outlook Remains Uncertain

While crypto prices showed signs of stabilization over the weekend, investors remain focused on several risks, including higher interest rates, rising bond yields, continued ETF outflows and growing competition from AI-focused investments. Whether the latest selloff marks a market bottom or signals further weakness remains a key question for traders and investors.