Bitcoin has slipped below the $60,000 threshold, marking a significant psychological break in the crypto market.
The asset has now lost more than half of its value from the peak of over $126,000 reached last year, according to recent market data.
This decline represents the most severe correction since the asset's previous cycle highs, pushing prices to their lowest level in nearly two years.
The theory that spot Bitcoin exchange-traded funds would act as a shock absorber during market downturns is facing its most significant test yet.
Institutional investors had anticipated that the introduction of regulated ETF products would stabilize volatility and provide a buffer against sharp sell-offs.
However, the current drawdown suggests that these instruments have not yet prevented the deep liquidity shocks characteristic of previous bear markets.