Bitcoin Drops Below $80K Amid Market Uncertainty and Bybit Hack

Bitcoin fell to a 3.5-month low on Friday, dropping over 5% to $79,666, marking its first dip below $80,000 since November. The decline comes amid growing investor concerns over U.S. trade policies, a lack of fresh crypto-friendly regulations, and a massive $1.5 billion hack targeting rival cryptocurrency Ethereum.

The world’s largest cryptocurrency has lost 25% of its value since peaking at $105,000 in mid-December when optimism surrounded a potential pro-crypto stance from the Trump administration. However, investors are now seeing little regulatory progress beyond initial appointments of crypto-friendly officials.

"The bullish momentum faded without fresh news to sustain it," said Kyle Rodda, a senior analyst at Capital.com. Market watchers also link Bitcoin’s decline to a broader sell-off in Wall Street’s high-growth tech stocks, particularly the "Mag 7," as investor confidence weakens.

Ethereum also plunged nearly 6% to $2,149, its lowest since January, following reports of a security breach at Bybit, the world's second-largest exchange. Blockchain analytics firm Elliptic labeled the $1.5 billion theft the largest crypto heist in history, further rattling market sentiment.

Additionally, Bitcoin-backed exchange-traded funds (ETFs) have seen outflows, reflecting a shift in investor sentiment. Rising concerns over global economic uncertainty, the Federal Reserve’s limited rate-cut plans, and Trump's proposed 25% tariffs on imports from Canada, Mexico, and China have contributed to a risk-off environment.

"It’s hard for Bitcoin to rally when macroeconomic pressures and security risks dominate headlines," said Reuben Conceicao, chief strategy officer at Metasig. As investors seek safer assets, U.S. Treasury yields have dropped, signaling increased market caution.

With a mix of regulatory uncertainty, economic turbulence, and security fears, Bitcoin faces significant resistance in reclaiming bullish momentum.