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Bitcoin slid on Thursday and Friday, dipping more than 7% to under $79,000.
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Options show traders positioning for a potential decline to $70,000.
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The cryptocurrency tipped into a bear market this week, down more than 20% from its January peak.
Bitcoin's selloff continued on Thursday night and Friday, falling more than 7% over several hours from above $84,000 to under $79,000, after the token entered a technical bear market this week.
It then recovered slightly and was trading at just over $80,000 at 7.40 a.m. ET.
Other cryptocurrencies, including Ether and XRP, also suffered similar declines.
Traders are eyeing the possibility that the declines will continue. Bitcoin options show open interest for put options with a strike price of $70,000 rose to the second-highest level among all contracts set to expire this Friday, according to Deribit data cited by Bloomberg.
If bitcoin were to fall to that level, it would mark a 35% drop from its record high above $109,000 in January.
"Bitcoin has confirmed a short-term breakdown within the context of its long-term uptrend," Katie Stockton, a top analyst and the founder of Fairlead Strategists, told Business Insider in a statement. "We would not rule out a test of secondary support near $73.8K (former resistance from 2024) before the corrective phase fully matures."
George Pavel, the general manager of the trading platform NAGA, told Business Insider on Thursday he believed bitcoin could drop as low as $70,000, given that the coin recently breached the key $90,000 resistance level.
Bitcoin slipped into bear market territory this week, with the crypto now down about 25% from its record high of $109,350 in January.
Meanwhile, the total market cap of bitcoin fell about 7% to $1.58 trillion on Friday, according to data from CoinMarketCap.
The sell-off appeared to be triggered by a broader risk-off move in markets, in addition to other factors that have damaged crypto investors' confidence.
Spot bitcoin ETFs saw more than $1.1 billion in outflows on Tuesday, according to data from Farside, affecting bitcoin's price.
Cryptocurrencies also saw heightened volatility and weaker sentiment after hackers stole $1.5 billion from the crypto exchange ByBit last week. Analysts say it could be one of the largest crypto hacks ever.
Pavel also thinks macroeconomic uncertainty and the Trump administration's slow progress in implementing pro-crypto policies could be adding to the selling pressure.
"That said, unless there is a significant shift in market dynamics or a catalyst that restores investor confidence, the rout could extend for some time," he said.
Read the original article on Business Insider