Bitcoin fell sharply on Saturday, extending a broad selloff that has unsettled cryptocurrency markets as investors reacted to growing concerns about tighter US financial conditions following a change in Federal Reserve leadership.
The world’s largest cryptocurrency slid more than 6 percent to about $78,720 by early afternoon in New York, according to market data. Prices later dipped below $76,000 during thin weekend trading, pushing bitcoin toward levels last seen in late 2024.
The move marked one of the steepest short term declines this year and reinforced fears that the market is entering a more difficult phase after months of fading momentum.
The latest drop followed news that former Federal Reserve governor Kevin Warsh had been chosen as the next Fed chair. On Friday, bitcoin had already fallen to $81,104, its lowest point since November, while the US dollar strengthened against major currencies.
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Warsh has previously called for a fundamental change in central bank policy, including reducing the size of the Fed balance sheet. Investors worry such a stance could drain liquidity from financial markets and pressure assets that benefited from years of loose monetary policy.
Digital currencies have historically performed well when liquidity was abundant, often rising during periods when the Fed supported money markets.
Brian Jacobsen, chief economist at Annex Wealth Management in Wisconsin, said concerns about shrinking liquidity are playing a central role in the current downturn.
He said the Fed balance sheet and strict bank regulation had kept capital concentrated in financial markets rather than flowing into the broader economy, contributing to elevated prices across assets such as cryptocurrencies, bonds, metals, and speculative equities.
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“When those conditions start to reverse, markets can adjust very quickly,” Jacobsen said. He added that the sharp decline on Friday reminded traders of how fast sentiment can shift and warned that additional selling could follow in the coming days.
Losses spread across the wider digital asset market. Ether fell nearly 12 percent to about $2,388 on Saturday afternoon, deepening a slide that has weighed on alternative tokens for months.
Cryptocurrencies have struggled to regain direction since last year’s downturn and have largely lagged rallies in gold and global stock markets. Bitcoin has now lost roughly one third of its value since reaching record highs in October.
Optimism that once surrounded a more favorable regulatory climate under President Donald Trump has also faded as macroeconomic forces take centre stage.
Traders are now focused on signals from US policymakers, including guidance on interest rates and balance sheet policy. Any confirmation of tighter financial conditions could add pressure to already fragile crypto markets.
