Bitcoin continued to slide on Friday, extending a weeks-long slump that has wiped out nearly $800 billion in value since the cryptocurrency hit its 2025 peak last month. The downturn has stripped away all of bitcoin`s gains this year - and raised questions about where it might go from here.

Since closing at almost $125,000 on Oct. 6, its highest price this year, bitcoin has shed about one-third of its value. On Friday, bitcoin sank below $82,000 before rebounding slightly to $83,509 before noon EDT, according to CoinGecko, a cryptocurrency data aggregator.

The cryptocurrency, which is trading at its lowest level since April, is now on track for its worst monthly performance since 2022, when a spate of corporate collapses sparked turbulence in the crypto sector, Bloomberg reported Friday.

The precipitous drop comes as Wall Street grapples with unease over whether there`s a bubble in artificial technology and tech stocks, prompting a shift away from assets that are viewed as carrying more risk, analysts say. Investors are also cautious given signs of weakness in the labor market, and the outlook for the Federal Reserve`s interest rate decision next month, with more economists now expecting the Fed to hold off on cutting rates.

"The future is uncertain. It almost feels like it`s moving back to the question: do I even want to hold [bitcoin] in this environment?" said Thomas Chen, the CEO of cryptocurrency company Function, in an email.

Why is Bitcoin falling?

Concerns about an AI bubble can translate into turbulence for cryptocurrencies because tech stocks tend to move in tandem with bitcoin, experts noted.

"When tech sneezes, it`s natural to expect Bitcoin to catch a cold," noted Nic Puckrin, investment analyst and co-founder of The Coin Bureau, in an email.

Aside from pulling back from riskier assets, some investors may be selling bitcoin to cover margin calls. Coinbase, for example, now offers "perpetual futures," a product that lets traders use up to 10-to-1 leverage on bitcoin and other cryptocurrencies.

Leveraged positions can force investors to sell because borrowing amplifies every price move - for both gains and losses. Even a small drop in the underlying asset can lead to an outsized loss on a leveraged trade. But if an asset tumbles and the investor can`t meet the margin requirements, the trading platform may automatically liquidate the position, which leads to more selling and downward pressure on its price.

"When traders borrow heavily to magnify positions, any reversal triggers liquidations that accelerate the move," Nigel Green, CEO of deVere Group, a financial advisory organization, said in an email.

Large declines in bitcoin`s price aren`t unusual, and the cryptocurrency has always rebounded, experts noted.

Brian Vieten, a research analyst at Siebert Financial, said in a Tuesday email that bitcoin has historically experienced around five corrections of 20-30% or more during bull markets, adding that the issues may represent "temporary headwinds" as some investors could view lower crypto prices as a buying opportunity.