Bitcoin edged close to the $72,000 threshold on Wednesday, extending a sharp slide that has now lasted two consecutive trading days.

The world’s first and most widely traded cryptocurrency briefly fell to around $72,096, a drop of more than 5% at one point during the session. By later trading hours, it had recovered slightly to about $72,958, still roughly 4% lower than the previous day. Even at that level, bitcoin remains more than 40% below the record high of approximately $126,000 reached in October last year.

The downturn intensified on Tuesday when bitcoin slipped under $73,000 for the first time in about 16 months, bringing it back near levels last seen before the U.S. presidential election. Market analysts have highlighted $70,000 as a psychologically and technically important benchmark that could shape the next phase of trading if the decline continues.

A mix of geopolitical uncertainty and shifting economic expectations has weighed heavily on the digital asset. Investor sentiment has turned more cautious amid rising tensions between the United States and several European countries over Washington’s stance on Greenland, as well as a recent partial U.S. government shutdown that delayed the release of key economic statistics.

At the same time, speculation about future U.S. monetary policy has added pressure. President Donald Trump’s nomination of Kevin Warsh as potential Federal Reserve chair has fueled expectations of a policy shift, while momentum behind pro-crypto legislation and regulatory reforms in the U.S. appears to have slowed.

Institutional activity has also played a significant role in the sell-off. According to analysts at Deutsche Bank, large-scale withdrawals from institutional investors anticipating a deeper correction have reduced market liquidity, amplifying downward price movements.

Spot bitcoin exchange-traded funds have experienced sustained outflows since a wave of leveraged crypto liquidations last October. These funds saw more than $3 billion in net withdrawals in January, about $2 billion in December, and roughly $7 billion in November, signaling continued caution among professional and retail investors alike.

The slump in bitcoin has rippled across the broader crypto sector. Strategy, a company that holds large amounts of bitcoin on its balance sheet, fell around 5% on the day, while major mining firms such as Riot Platforms and MARA Holdings dropped nearly 11% as investor confidence weakened.