Why did the Bitcoin price just plunge more than 7%?

The Bitcoin (CRYPTO: BTC) price is taking a beating on Wednesday.

In earlier trade today, the world’s biggest crypto by market cap had sunk to US$66,127, down more than 7% overnight.

At time of writing, Bitcoin is fetching US$66,683 (AU$93,039), which leaves the token down 6.4% since this time yesterday.

This puts the price down some 12% over the past week, and down a sharp 37% over the last 12 months.

As you may be aware, it was less than a year ago, on 7 October, that the world’s first cryptocurrency notched its all-time high of US$126,198. With the overnight selling, this now sees the Bitcoin price down more than 47% from that record.

Here’s what looks to be causing the latest selling pressure.

Why is the Bitcoin price getting slammed?

There are a number of headwinds working against Bitcoin recently.

First, we have the ongoing Middle East conflict. This is stoking global energy prices and inflation, and leading to the prospect of higher than previously forecast interest rates in the world’s major economies. The Bitcoin price, like many risk assets, tends to perform better in lower rate environments.

Second, it seems that many crypto investors were spooked by news that Bitcoin treasury juggernaut Strategy had sold 32 of its tokens for US$2.5 million.

That looks to be causing some angst, because it was only back in February 2025 that Strategy founder Michael Saylor ‘tweeted’ on X that crypto investors should “never sell your bitcoin”.

While Strategy’s Bitcoin divestment represents only a small part of its total holdings, reportedly valued at around US$66.7 billion, Saylor’s backflip on the “never sell” didn’t go down well with many crypto investors.

According to Pratik Kala, head of research at Apollo Crypto (quoted by The Australian Financial Review):

Now that [Strategy] has sold even a small amount, it’s basically broken the fog. People are now questioning: ‘Well, if the largest holder of bitcoin is selling, what does that mean?’ It will create a little bit of a fear and uncertainty doubt cycle.

Jasper De Maere, OTC trader at Wintermute, added:

The selloff feels triggered by Strategy’s disclosure that it sold 32 BTC. However, reality is that even without this headline, momentum was fading and institutional participation we saw on the OTC desk was grinding back to the lows.

Ryan McMillin, co-founder of Merkle Tree Capital, noted that the Bitcoin price is facing a third stiff headwind.

Namely the rapid rise and investment allure of artificial intelligence.

McMillin said (quoted by the AFR):

If we didn’t have AI flying along like it was last year, then I think bitcoin probably would have gone a lot higher. It sucks a lot of liquidity out of the room, particularly for those with a risk appetite that want to have high-growth assets.

The post Why did the Bitcoin price just plunge more than 7%? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.