The main reason for Bitcoin's decline is the decrease in global risk appetite. By the end of March 2026, Bitcoin had fallen to $65,953, experiencing a 4.25% loss in the last 24 hours and a nearly 20% drop since the beginning of the year. This decline is primarily due to geopolitical tensions in the Middle East. The risk of conflict between the US and Iran and developments in the Strait of Hormuz pushed oil prices above $100, triggering inflation concerns. In this environment, even traditional safe havens like gold and silver experienced nine consecutive sessions of decline, creating selling pressure across risky assets.

Macroeconomic factors also deepened the decline. Due to the Federal Reserve's hawkish stance, the number of expected interest rate cuts in 2026 decreased, and in some scenarios, the possibility of an interest rate increase even emerged. The high interest rate environment and quantitative tightening policies tightened liquidity, directly negatively impacting high-risk assets like Bitcoin. During the same period, billions of dollars were withdrawn from Bitcoin ETFs, institutions reduced their positions, and long-term whales realized profits and started selling. The liquidation of leveraged long positions exceeded $240 million in a single day, accelerating the short-term downward momentum.

Regulatory uncertainties also weighed on the market. The passage of crypto reform legislation like the Clarity Act slowed, and provisions limiting stablecoin returns eroded investor confidence. This reduced institutional demand and decreased overall market liquidity. Furthermore, according to four-year cycle analysts, the bear market continues after the peak of $126,000 in October 2025, with some experts predicting a further decline of up to 30% throughout 2026. Technically, Bitcoin failed to break the $70,000 resistance, the $60,000 support level became critical, and the bearish flag formation reinforced the downward pressure.

The combination of all these factors explains Bitcoin's weak performance in 2026. Investors are waiting for clarification of Fed policy and a return to positive institutional flows without a reduction in geopolitical risks, but a strong catalyst is needed for a short-term recovery.
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