Bitcoin Stabilizes Near $78K After Weekend Plunge, But Analysts Warn Downtrend Remains Firm

Bitcoin (BTC-USD) traded around $78,000 on Monday, attempting to steady itself after a weekend rout that sent shockwaves through digital asset markets. The tentative stabilization, however, is being met with skepticism from analysts who see few signs of a sustainable reversal.

The cryptocurrency plummeted on Saturday, brushing lows not seen since April of last year and cementing a fourth consecutive monthly loss. The sell-off appeared to accelerate following Friday's political news: former President Donald Trump's selection of perceived hawk Kevin Warsh to lead the Federal Reserve, a move that rattled not only crypto but also precious metals like gold.

"The calm today feels more like exhaustion than conviction," said Mark Chen, a portfolio manager at Horizon Digital Assets. "Flow data we're seeing suggests investors are still in risk-off mode, focused on reducing exposure rather than hunting for bargains. The path of least resistance is still down."

Research firm 10X Research noted in a Sunday report that with Bitcoin's next major technical support sitting around $73,000, current market dynamics indicate a "meaningful shift in sentiment." The firm's analysts pointed out that despite oversold technical indicators, "the broader downtrend remains intact" in the absence of a clear positive catalyst.

The pressure reflects a fragile crypto ecosystem still reeling from last year's whale selling and forced liquidations. Year-to-date, Bitcoin is down over 12%, while Ether (ETH-USD) has shed 23%. Overall, the crypto market has shed approximately $1.7 trillion in value from its peak.

Some see a glimmer of opportunity in the pessimism. "The levels hit over the weekend and the visible capitulation create a more attractive near-term risk/reward setup," noted Sean Farrell, Head of Digital Assets at Fundstrat. He identified the mid-$70,000s as a logical support zone, referencing key price levels from 2024 and 2025. Farrell suggested a "modest" deployment of capital could be warranted but echoed concerns about lingering risks in traditional markets that could spill over.

Market Voices:

• David Park, Independent Crypto Trader: "This is a healthy flush-out. The leverage is gone, the weak hands are out. We're building a base here for the next move up. Everyone's bearish, which is historically a good contra-indicator."
• Rebecca Shaw, Chief Economist at FinTech Watch: "The correlation with gold on the Warsh news is telling. Crypto is acting as a risk asset, not a hedge. Until macro uncertainty clears, particularly around Fed policy, institutional money will stay on the sidelines."
• Leo Grant, Host of 'Crypto Unchained' Podcast (Emotional/Sharp): "Are you kidding me? 'Logical support zone'? This is a house of cards built on memes and hype. It's down 40% from the top and people are talking about buying? This isn't a dip, it's a collapse. The so-called 'digital gold' narrative is dead every time it trades like a speculative tech stock."
• Anya Petrova, Blockchain Analyst at Vantage Point Partners: "The data shows sustained outflows from major ETFs. This isn't just speculators; it's institutional repositioning. The market needs a new narrative, not just to hold old lines. The next few weeks of inflation data will be critical."

Ines Ferre is a senior business reporter for Yahoo Finance.