Bitcoin is having its worst month since the major crypto crashes of 2022, when several big companies in the space collapsed. Over the past few days, the price of Bitcoin has dropped sharply, falling as much as 6.4% in a single day to around $81,629 before slightly bouncing back. As of early morning trading in London, Bitcoin was hovering near $84,166. Ethereum, the second-largest cryptocurrency, also took a hit—dropping as much as 7.6% to below $2,700.

So far this month, Bitcoin has lost about 23% of its value. This marks its steepest monthly drop since June 2022, when the collapse of TerraUSD triggered a chain reaction that eventually led to the downfall of FTX, one of the biggest crypto exchanges at the time.

This downturn comes despite some positive signs earlier this year, including growing support from institutional investors and a more favorable political climate for crypto under former President Donald Trump. Just last month, Bitcoin reached a record high, but since then, it has crashed more than 30%.

A major reason for this sharp decline is a wave of liquidations—when traders using borrowed money are forced to sell. On October 10 alone, around $19 billion worth of leveraged crypto bets were wiped out. That sell-off erased roughly $1.5 trillion from the total value of all cryptocurrencies combined.

And the pressure hasn’t let up. In just the past 24 hours, another $2 billion in leveraged crypto positions were liquidated, according to data from CoinGlass.

Investors don’t seem eager to step in and buy during the dip. On Thursday, U.S.-listed Bitcoin exchange-traded funds (ETFs) saw $903 million pulled out—their second-largest single-day loss since they started trading in January 2024.

Open interest in perpetual futures contracts has also plunged by 35% from its peak of $94 billion in October. This shows that fewer traders are willing to place long-term bets on the market right now.

Broader financial markets aren’t helping either. U.S. stock markets recently gave up gains driven by excitement over AI and strong earnings from Nvidia, as concerns grow over high valuations and whether the Federal Reserve will cut interest rates next month.

Market sentiment remains weak. According to portfolio manager Pratik Kala from Apollo Crypto, there may be a large investor selling off assets, but it’s unclear how far this will go.

Analyst Tony Sycamore from IG Australia suggests that the market could be testing how much pain major Bitcoin investors can take—especially Michael Saylor’s company, which has made massive bets on Bitcoin. If prices fall further, it could trigger margin calls on their leveraged positions, adding even more pressure to the market.

In summary, Bitcoin and the wider crypto market are facing intense selling pressure, with sharp declines in price, massive liquidations, and growing investor uncertainty.