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Bitcoin staged a partial recovery after briefly testing the $60,000 level, rebounding from its weakest point in more than a year as pressure across global financial markets showed early signs of easing.

The world’s largest cryptocurrency had fallen sharply earlier in the session, sliding by around 5% to just above $60,000. It later recovered, rising by over 3% to trade at approximately $65,200. Despite the bounce, bitcoin remains close to its lowest level since October 2024, reflecting the broader cooling of risk appetite among investors.

Market analysts have pointed to the rapid unwinding of crowded positions as a key factor behind recent price movements. The sell-off has not been confined to digital assets alone, with technology stocks, precious metals, and other speculative investments also experiencing heightened volatility.

Ether followed a similar pattern, rising by almost 4% to around $1,919 after earlier falling to a near 10-month low. Both assets remain under pressure on a year-to-date basis, with bitcoin down roughly 26% so far this year and ether recording losses of close to 36%.

According to data from CoinGecko, the total value of the global cryptocurrency market has fallen by approximately $2 trillion since peaking in early October. More than $1 trillion of that decline has occurred over the past month alone, highlighting the speed and scale of the recent correction.

Bitcoin’s performance has increasingly mirrored movements in the wider technology sector, particularly during periods of strong investor enthusiasm for themes such as artificial intelligence. As risk sentiment shifted, assets that had benefited from speculative inflows, including cryptocurrencies, gold, and silver, came under renewed pressure.

Some commentators argue that the recent pullback reflects a broader re-pricing of risk rather than a fundamental collapse in the crypto market. Investors who relied heavily on leverage or assumed continued price increases are now facing the realities of market volatility and tighter risk conditions.

Confidence in digital assets has also been affected by sustained outflows from investment products. Analysts at Deutsche Bank noted that US spot bitcoin exchange-traded funds recorded net outflows of more than $3 billion in January, following significant withdrawals in the previous two months. These figures suggest that institutional sentiment toward cryptocurrencies has remained cautious.

While today’s rebound has offered some relief, market observers continue to warn that volatility is likely to remain a defining feature of the crypto landscape in the near term.

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