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Why is bitcoin down today

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Bitcoin losing $70,000 is a warning sign for further downside

Bitcoin has now dropped from the $70,000 level three times since the Feb. 5 crash as Wednesday’s Asian session found the market back at $67,600 after another failed attempt earlier in the week.

BTC was trading at $67,612 as of Asian morning hours on Wednesday, down 0.7% over the past 24 hours but up 3.4% on the week as the post-strike recovery held. Ether slipped 2.2% to $1,957, giving back some of its bounce but still up 2.6% on a seven-day basis. BNB was the quiet outperformer, up 5.2% on the week at $629.

The damage was concentrated further down the board. Dogecoin fell 2.9% in 24 hours and is down 3.9% on the week. Cardano dropped 4.2% on the day and 3.5% over seven days. Solana lost 0.8% to $85.16 and remains the worst-performing major on a weekly basis at -4.2%, still carrying the weight of Saturday’s sell-off. XRP held relatively flat, down 1.3% to $1.35 with a modest 1.5% weekly gain.

The pattern across the board is the same. Most majors recovered from the weekend lows but couldn’t hold Tuesday’s highs, leaving the market in a holding pattern while it waits for clarity on the Iran situation and Monday’s traditional market reaction to settle.

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“BTC bouncing back to $70K looks like a classic shock, flush, rebuild move. A lot of the weekend selling was forced, and liquidity was thin, so the rebound can be fast once pressure lifts,” said Wojciech Kaszycki, CSO of BTCS SA, said in an email. “After BTC’s move back above $70K, the real signal isn’t the price spike. It’s whether ETF inflows stay steady this week.”

FxPro chief analyst Alex Kuptsikevich noted that Tuesday’s rejection “forces us to consider a decline to $63K as a working scenario” if the upper boundary continues to hold.

The macro backdrop isn’t helping. Asian equities sold off hard Wednesday, with South Korean stocks posting their biggest two-day decline since 2008 as the Iran conflict continued to rattle investors.

Tech stocks across the MSCI Asia Pacific index fell 4%, dragging Japan, Taiwan, and South Korea lower. The Indian rupee dropped to a record low on the oil price hit. Gold climbed higher, pulling silver with it for the first time this week.

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Oil remains the key variable. Brent jumped again Wednesday despite the U.S. announcing plans to escort tankers through the Strait of Hormuz, which has been effectively closed since the weekend strikes.

Meanwhile, U.S president Donald Trump floated an insurance scheme for oil tankers but provided no details. The longer the strait stays disrupted, the more energy prices feed into inflation expectations, which pushes rate cuts further out, which tightens the liquidity environment that drives risk assets.

“We think that Bitcoin is an emerging reserve asset,” said Gracy Chen, CEO at Bitget. “Many people simply cannot fully accept this yet because it is easier to invest into gold, which has existed for many years, than into Bitcoin, which is still young and risky.”

Chen pointed to the broader disappointment in crypto markets following earlier crashes, noting that “the current decline in Bitcoin is largely driven by this disappointment, especially against the backdrop of rising equities, gold, silver, and stock indices reaching new highs.”

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Crypto World

Aave’s TVL Falls $8B After $293M Kelp DAO Hack

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Aave’s TVL Falls $8B After $293M Kelp DAO Hack

Total value locked on decentralized lending protocol Aave dropped by nearly $8 billion over the weekend after hackers behind the $293 million Kelp DAO exploit borrowed funds on Aave, leaving roughly $195 million in “bad debt” on the protocol and triggering withdrawals.

Data from DeFiLlama shows that Aave’s TVL fell from about $26.4 billion to $18.6 billion by Sunday, losing the top spot as the largest DeFi protocol. 

Aave v3’s lending pools for USDt (USDT) and USDC (USDC) are now at 100% utilization, meaning that more than $5.1 billion worth of stablecoins cannot be withdrawn until new liquidity arrives or borrows are repaid. 

$2,540 is available to be withdrawn from the $2.87 billion USDT pool on Aave v3 at the time of writing. Source: Aave

Aave’s TVL fall shows how rapidly risk from a single security incident can spread throughout the broader, interconnected DeFi lending market, potentially leading to a severe liquidity crisis.

The incident began on Saturday when hackers stole 116,500 Kelp DAO Restaked ETH (rsETH) tokens worth about $293 million from Kelp DAO’s LayerZero-powered bridge and used them as collateral on Aave v3 to borrow wrapped Ether (wETH).

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Crypto analytics platform Lookonchain said the move created about $195 million in “bad debt” on Aave, which contributed to the Aave (AAVE) token tanking nearly 20% from $112 on Saturday at 6:00 pm UTC to $89.5 about 25 hours later. 

Lookonchain noted that some of the largest crypto whales to withdraw funds from Aave were the MEXC crypto exchange and Abraxas Capital at $431 million and $392 million, respectively.

Source: Grvt

Several crypto networks and protocols tied to rsETH or the LayerZero bridge have paused use of the bridge until the problem is resolved, including DeFi platform Curve Finance, stablecoin issuer Ethena and BitGo’s Wrapped Bitcoin (WBTC).

Aave has frozen several rsETH, wETH markets

Shortly after the Kelp DAO exploit, Aave said it froze the rsETH markets on both Aave v3 and v4 to prevent any suspicious borrowing and later stated that rsETH on Ethereum mainnet remains fully backed by underlying assets.

WETH reserves also remain frozen on Ethereum, Arbitrum, Base, Mantle and Linea, Aave said.

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This incident marks the first significant stress test of Aave’s “Umbrella” security model, which was introduced in June 2025 to provide automated protection against protocol bad debt while enabling users to earn rewards.

Related: Aave DAO backs V4 mainnet plan in near-unanimous vote

Earlier this month, the Bank of Canada found that Aave avoided bad debt in its v3 market by using overcollateralization, automated liquidations and other strategies that shifted risk to borrowers.

In comments to Cointelegraph, Aave defended its liquidation-based model, framing it as a core safety mechanism that protects lenders while limiting downside for borrowers.

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It comes as Aave parted ways with its longest-standing DeFi risk service provider, Chaos Labs, on April 6, following disagreements over the direction of Aave v4 and budget constraints.

Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?