Bitcoin Price Plummets After Hitting $126,000: Key Factors Behind the Decline
Bitcoin price crash after $126,000 peak: What triggered the drop and can BTC USD recover to new all-time highs? Here's what crypto traders need to know
The Economic TimesImage: The Economic Times
Bitcoin (BTC USD) peaked at $126,000 in October 2025 but has since fallen to around $77,000 due to a combination of tariff shocks, ETF outflows, and large holder sell-offs. Recovery hinges on maintaining key price levels and broader market conditions influenced by Federal Reserve policies.
- 01Bitcoin's price dropped below $105,000 within days of reaching its peak, primarily due to a broader tech stock selloff and heavy ETF outflows.
- 02In January 2026, over $3 billion exited spot Bitcoin ETFs, reversing the inflow trend that had supported the previous rally.
- 03The critical price zone for Bitcoin's recovery is between $79,000 and $80,000, which it must reclaim for sustained upward movement.
- 04US inflation rose to 3.3% in March 2026, prompting the Federal Reserve to maintain a tight monetary policy, impacting Bitcoin's price.
- 05Forecasts suggest Bitcoin could reach between $120,000 and $175,000 by late 2026 or early 2027, depending on institutional demand and macroeconomic conditions.
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Bitcoin (BTC USD) experienced a significant decline after reaching an all-time high of $126,000 in October 2025, with prices dropping to approximately $77,000 as of early February 2026. The rapid fall was triggered by a combination of tariff shocks, widespread liquidation of leveraged positions, and substantial outflows from Bitcoin exchange-traded funds (ETFs). In January alone, more than $3 billion exited spot Bitcoin ETFs, reversing the previous inflow trend. Currently, Bitcoin's recovery is contingent on maintaining key price levels, particularly the $79,000–$80,000 range, which is crucial for any sustained upward movement. The Federal Reserve's monetary policy under new chair Kevin Warsh, which indicates a steady interest rate environment, is also influencing market sentiment. Despite institutional support, including significant inflows into US spot Bitcoin ETFs, risks remain due to rising inflation and market sensitivity. Analysts predict that Bitcoin could potentially reach new highs between $120,000 and $175,000 by late 2026 or early 2027, contingent on institutional demand and macroeconomic stability.
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Bitcoin's price fluctuations can significantly affect investors and traders in the cryptocurrency market.
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