Quick Read
- Bitcoin’s price plummeted to nearly $60,000 this week, falling from an October 2025 high of $126,000.
- Volmex’s Bitcoin Volatility Index (BVIV) spiked to nearly 100%, its highest level since the 2022 FTX collapse.
- The cryptocurrency’s value decreased by up to 30% in a week, with over 50% decline from its peak.
- Institutional investors, including U.S. ETFs, have shifted from net buyers to net sellers of Bitcoin.
- Broader economic and geopolitical uncertainties are contributing to a widespread ‘risk-off’ market sentiment.
YEREVAN (Azat TV) – Bitcoin prices cratered to nearly $60,000 this week, triggering a sharp surge in market volatility to levels not seen since the 2022 FTX collapse, as investors grapple with shifting sentiment and broader economic uncertainties. The leading cryptocurrency, which briefly touched $60,062.00, has seen its value decrease by as much as 30% in a single week, marking a more than 50% decline from its October 2025 peak of $126,000.
The dramatic downturn has prompted a rush for downside protection among traders and raised questions about Bitcoin’s role as a hedge against inflation and economic instability. Other major cryptocurrencies, including Ethereum and Solana, have also experienced significant losses, reflecting a widespread sell-off across the digital asset market.
Volatility Gauge Signals Extreme Panic
The intensity of the market panic was starkly reflected in Volmex’s Bitcoin Volatility Index (BVIV), a crypto equivalent to Wall Street’s VIX ‘fear gauge’. The BVIV spiked to nearly 100% from 56% on Thursday, reaching its highest level since the dramatic collapse of the FTX exchange in late 2022, CoinDesk reported. This surge indicates annualized expected price turbulence over four weeks, signaling intense demand for insurance against further price declines.
Cole Kennelly, founder and CEO of Volmex Labs, told CoinDesk that a ‘wave of panic swept through crypto markets this week, correlated to a sharp risk-off move across various asset classes.’ Data from Deribit Metrics revealed that traders scrambled to buy put options, which are contracts used to bet on price drops or hedge against them, with the top five most traded options being puts at strikes ranging from $70,000 down to $20,000. Jimmy Yang, co-founder of institutional liquidity provider Orbit Markets, noted that clients rushed to buy downside protection, fearing the price crash could devastate digital asset treasuries that had acquired Bitcoin at higher levels.
Institutional Pullback and Broader Market Stress
Analysts point to a significant reversal in institutional demand as a primary driver for the current market stress. CNBC reported that U.S. exchange-traded funds, which were net buyers of 46,000 Bitcoin this time last year, are now net sellers in 2026, according to a report by CryptoQuant. Deutsche Bank analyst Marion Laboure suggested that ‘this steady selling in our view signals that traditional investors are losing interest, and overall pessimism about crypto is growing.’
The sell-off has been amplified by broader economic and geopolitical uncertainties. Concerns include a slowdown in the labor market and inflation rates remaining above the Federal Reserve’s 2% target, as noted by ABC News. Geopolitical tensions, such as negotiations over Greenland, U.S.-backed leadership in Venezuela, the ongoing conflict between Russia and Ukraine, and escalating U.S. threats against Iran, have also contributed to a risk-off environment, prompting investors to exit perceived riskier assets. President Donald Trump’s administration is also navigating these complex domestic and international challenges, with the president reportedly keen on a strong economy ahead of the midterms.
Bitcoin’s Journey: From Peak to Current Reassessment
Bitcoin’s rapid descent follows a period of significant gains. The cryptocurrency’s price of approximately $66,100 on Thursday afternoon left it 48% below its all-time high of about $126,210, attained just four months earlier in October 2025, ABC News reported. The recent price action has also highlighted Bitcoin’s underperformance compared to traditional safe-haven assets; while Bitcoin is down nearly 40% over the past year, gold futures have gained 61% in the same period, according to CNBC.
Despite its historical volatility, Bitcoin has maintained a long-term upward trajectory, climbing 63% over the past five years, though still lagging the S&P 500’s 75% increase over the same period. However, the current downturn reflects a market where previous ‘sensationalized claims’ about Bitcoin’s utility as a hedge against inflation and an alternative to fiat currencies have largely failed to materialize. Maja Vujinovic, CEO of digital assets at FG Nexus, told CNBC that ‘Bitcoin isn’t trading on hype anymore, the story has lost a bit of that plot, it is trading on pure liquidity and capital flows.’
The market’s reaction also points to widespread liquidations of leveraged long positions, exacerbating the downward pressure. While prices briefly bounced to over $64,000 from overnight lows, market sentiment remains steeped in ‘extreme fear,’ according to Orbit Markets. If price action stabilizes near the $60,000 level, volatility could potentially pull back, but significant uncertainty, particularly around further unwind cascades from digital asset treasuries, persists.
The current market environment for Bitcoin underscores a critical shift from speculative enthusiasm to a more sober assessment of its practical utility and resilience in the face of macroeconomic headwinds, demanding greater scrutiny of its role within diversified investment portfolios.