Bitcoin Crashes to $60,000: Worst Drop Since FTX, Fear Index at Record Low

The crypto market just experienced its worst week since the FTX collapse in November 2022. Bitcoin plunged from $122,000 (its all-time high in October 2025) to $60,000 on Thursday — a staggering drop of over 50% in four months. What happened? And more importantly, should you panic or is this an opportunity?

In this article, we analyze in detail the causes of this crash, the data showing the market is in “extreme fear” mode, and what history teaches us about situations like this.

Anatomy of a Crash: Key Figures

The data speaks for itself. In one week, Bitcoin lost 30% of its value, falling from $87,000 to a low of $60,033 Thursday evening (US time), before rebounding to around $65,000.

Fear & Greed Index at Lowest Since FTX

The Fear & Greed Index, which measures investor sentiment on a scale of 0 to 100, dropped to 9 — a reading categorized as “extreme fear” that hadn’t been seen since the FTX crash.

As a reminder, this index combines several factors: volatility, trading volumes, social media activity, Bitcoin dominance, and Google Trends data related to crypto searches. A score of 9 means the market is in total panic mode.

RSI: The 3rd Most Oversold Level in History

The RSI (Relative Strength Index), a technical indicator measuring whether an asset is overbought or oversold, dropped to 17.6. To put this number in perspective:

• 2018 (bear market bottom): RSI at 9.5 → Bitcoin then quadrupled in 8 months
• 2020 (Covid crash): RSI at 15.6 → Bitcoin went from $3,900 to $65,000 in one year
• 2026 (today): RSI at 17.6 → ?

Historically, such extreme oversold levels have preceded violent rebounds. But as always in finance, past performance is no guarantee of future results.

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$2.5 Billion Liquidated

Liquidations reached record levels this week. According to data from CoinGlass and Reuters:

• Thursday alone: $1.5 billion in positions liquidated
• Over the week: more than $2.5 billion
• Since the October peak: approximately $800 billion in market cap wiped out

These forced liquidations create a snowball effect: when the price drops, leveraged positions are automatically sold, which pushes the price down further, triggering more liquidations.

BlackRock ETF: Record $10.7 Billion Volume

BlackRock’s Bitcoin ETF (ticker IBIT) recorded a trading volume of $10.7 billion on Thursday — an absolute record that shattered the previous record of $5.7 billion from November 2025.

This record volume came with several concerning signals:

• Massive redemptions: $175 million withdrawn in a single day
• Record put options: put options (bearish bets) reached a 25 volatility point premium above calls
• ETF price: -13% to $35, its lowest since October 2024

This combination of record volume and price crash is often considered a sign of institutional capitulation — the moment when long-term investors throw in the towel and sell at a loss.

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Why Did Bitcoin Crash?

Several factors converged to create this perfect storm. Here are the main hypotheses put forward by analysts:

1. Kevin Warsh’s Nomination to the Fed

Deutsche Bank points to Kevin Warsh’s nomination as the new Federal Reserve chair as the initial trigger. Warsh is considered a “hawk,” favoring high interest rates to fight inflation.

Higher rates are generally unfavorable to risky assets like cryptocurrencies. Investors then prefer to put their money in guaranteed-yield bonds rather than volatile assets.

2. A Hedge Fund in Trouble?

On X (Twitter), several influential traders are discussing the possibility of an Asian hedge fund blowup. Franklin Bi, from Pantera Capital, suggests that a large Asia-based player may have been forced to massively liquidate their positions.

The reconstructed scenario: a fund using leverage on Binance was caught in the yen carry trade unwind, then tried to recover on gold and silver. The failure of this strategy triggered a forced sale this week.

3. Yen Carry Trade Unwind

The carry trade involves borrowing in a low-rate currency (like the Japanese yen) to invest in higher-yielding assets. When the yen strengthens or Japanese rates rise, these positions must be unwound, causing massive selling.

4. US-Iran Geopolitical Tensions

Nuclear negotiations between the United States and Iran resurfaced this week, creating uncertainty in the markets. During geopolitical tension, investors tend to flee risky assets.

5. Quantum Fear

A more unexpected factor: the debate over Bitcoin’s security against quantum computers. Charles Edwards of Capriole reignited concerns by suggesting that falling prices could finally force the ecosystem to take this risk seriously.

6. Strategy (formerly MicroStrategy) Under Pressure

Michael Saylor’s company announced a loss of $12.4 billion in Q4 2025. With 640,808 BTC on the balance sheet and an average purchase price of $74,000, Strategy now has $24 billion in unrealized losses at current prices.

MSTR stock fell 13% on Thursday, fueling fears that the company could be forced to sell some of its bitcoins.

What History Teaches Us

Crashes of this magnitude are rare but not unprecedented. Here’s what happened after previous episodes of extreme fear:

FTX Crash (November 2022)

The Fear Index had dropped to 6. Bitcoin had hit $15,500. A year later, it was back up to $44,000, and had reached $122,000 by October 2025.

Covid Crash (March 2020)

Bitcoin had dropped 50% in two days, going from $8,000 to under $4,000. Within a year, it reached $65,000.

2018 Bear Market

After hitting a bottom at $3,150 with an RSI of 9.5, Bitcoin quadrupled in 8 months to reach $13,800.

The common pattern: moments of extreme fear have historically been attractive entry points for long-term investors. But this doesn’t mean the bottom has already been reached — Stifel predicts a possible return to $38,000.

What Should You Do Now?

Facing a crash of this magnitude, three strategies are available to investors:

1. Do Nothing (HODL)

If you’re a long-term investor with a multi-year horizon, short-term fluctuations shouldn’t affect your strategy. History shows that Bitcoin has always ended up exceeding its previous records.

2. Gradually Reinforce (DCA)

Dollar Cost Averaging involves regularly investing a fixed amount, regardless of price movements. This strategy allows you to smooth out your average purchase price and benefit from dips without trying to “time” the market.

3. Wait for Bottom Confirmation

More cautious traders prefer to wait for technical reversal signals before positioning themselves. A rebound above the 200-day moving average (currently around $58,000) would be a first positive sign.

Important: never invest more than you can afford to lose. Crypto markets remain extremely volatile.

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