Bitcoin’s recent crash has left investors reeling as the cryptocurrency plunged below $80,000, erasing nearly all gains made since the U.S. election. Amid widespread concern, Binance co-founder Changpeng Zhao, known as CZ, offered advice on navigating market downturns.
The price of Bitcoin fell to $78,393 before slightly recovering to $79,330, marking an 8% decline within 24 hours, according to CoinGecko data. Since reaching a January peak of $108,700, Bitcoin has lost nearly 30% of its value. The broader cryptocurrency market has also taken a significant hit, dropping 9.5% in the last day to a total valuation of $2.73 trillion. Ethereum, the second-largest crypto asset, fell 10.5% to $2,109, its lowest level in over 14 months. Other major altcoins, including Dogecoin and Cardano, each dropped by more than 11%, while Solana and XRP also posted double-digit declines.
The sell-off intensified following U.S. President Donald Trump’s announcement of new tariffs on China, a move that rekindled fears of economic instability. More than $932 million in crypto-leveraged positions were liquidated over 24 hours, according to Coinglass, further exacerbating the downturn.
CZ Urges Investors to Reduce Exposure
As Bitcoin’s price fell, CZ took to X to address market anxiety. “Dips are a part of free markets,” he wrote, advising investors to reassess their positions. “If you are stressed about it, you probably should reduce your investment size.”
In a follow-up post, he reiterated the importance of psychological resilience in crypto trading. “If you got shaken out during the dip, reduce your size to a level you can handle,” he said. “Mental stability beats all market volatility.”
CZ emphasized that market downturns are an inherent feature of the crypto space, cautioning investors to adopt a long-term perspective. He noted that for him, cryptocurrency represents more than just an investment, describing it as “a worldview shift.”
Analysts Warn of Further Declines
Financial experts suggest that Bitcoin’s troubles may not be over. Wolfe Research analyst Read Harvey indicated that Bitcoin could fall to $70,000 if it fails to rebound decisively above $90,000. “$91,000 acted as the floor over the past several months. With that level now decisively taken out, anything less than another V-shaped oversold response would send a very bearish message. So far not so good,” Harvey told CNBC.
Bitcoin last traded at $70,000 in early November, after favorable election polling results buoyed investor confidence. However, Trump’s latest tariff decisions, including doubling a 10% universal tariff on Chinese imports, have reignited concerns about inflation and economic growth, putting pressure on risk assets like cryptocurrencies.
While some investors panic amid the downturn, others, including pseudonymous analyst Rager, remain calm. Rager told his 201,600 followers on X that it “wouldn’t be abnormal to drop to mid to low $70ks.”
CZ’s remarks reinforce a broader theme in the cryptocurrency market: volatility is inevitable, but investors can mitigate risks by managing their exposure. With Bitcoin’s next moves uncertain, traders face a crucial test in balancing risk and resilience.
