Key Highlights
- Bitcoin dropped below $85,000, falling about 6% in 24 hours and now trading near $84,700 after failing to hold above $90,000.
- Nearly $850 million was liquidated as over 216,000 traders were forced out of their positions.
- Stock market volatility drove the sell-off, especially after Microsoft shares fell 11%, dragging major indexes down and putting pressure on risk assets like Bitcoin.
Bitcoin (BTC) has fallen below $85,000 again, currently trading near $84,704 after losing roughly 6.15% in the past 24 hours. The drop came after Bitcoin briefly reached highs above $90,000 earlier in the week.
Trading activity is up by 35% in the last 24 hours, resulting in over $55 billion in volume. However, the selling pressure suggests this is just traders selling their positions instead of buying.
This price drop came after the cryptocurrency failed to hold about key technical levels. After briefly crossing $90,000, the token quickly reversed, dropping to lows around $84,416, before moving up slightly. As a result, Bitcoin’s total market capitalization has dropped by 6.73% to $1.68 trillion.
Rate outlook and stock market volatility hit crypto
The drop comes amid recent macro events, including the U.S. Federal Reserve reporting today that the labor market is strong, with unemployment at 4.4%. With this, there was no signal reason for urgent rate cuts, which has influenced investors’ decisions, especially toward Bitcoin, which is seen as a risky asset.
Meanwhile, volatility in traditional markets intensified. Microsoft shares fell more than 11% after the company reported a steep growth in its cloud business, which was weaker than investors expected. This dragged the Nasdaq down by about 1.5%, increasing selling pressure across tech stocks.
The S&P 500 fell 1.2%, while the Dow Jones Industrial Average lost 304 points. The S&P 500 Volatility Index jumped to 19, its second-highest level since November, showing rising uncertainty in the market. At the same time, the DXY index, which tracks the U.S. dollar, rebounded to 96.6, putting extra pressure on risk assets like Bitcoin.
Nearly $850 million liquidated in 24 hours
This turbulence in the stock market spilled over into the crypto market. Aside from Bitcoin, the overall market felt it, leading to a 4% drop in total market valuation from $2.91 trillion down to $2.87 trillion.
Major altcoins, including Ethereum, Solana, Dogecoin, and Cardano, lost between 5% and 6% during the same period. As a result, 216,843 traders were liquidated from the market. According to CoinGlass, around $849.73 million was liquidated in total. $730 million from the amount came from traders who had bet on prices going up, while $119 million came from short position traders.
Corporate Bitcoin holders also felt the impact, with Strategy (MSTR) down 8%, marking its worst day since December 12 and returning to September 2024 levels. Circle (CRCL) and Coinbase (COIN) posted losses between 4% and 8%.
Bitcoin to test key support levels at $80K
Looking at the chart on the daily timeframe, Bitcoin is dropping to $80k, where the nearest support level is located. The price has tested this zone multiple times, which could act as a critical level for stabilization in the coming days.
Moreover, the Relative Strength Index (RSI) is at 33, while the moving average is at 46. This confirms that the price is currently controlled by the seller. However, it is approaching an oversold condition, which could act as a stable position for buyers to take over.
$8 billion in Bitcoin options set to expire
Looking ahead, traders are preparing for Friday’s Bitcoin options expiry, which is expected to be one of the largest this year. Options worth $8.27 billion will expire on Deribit at 8:00 UTC, the world’s largest crypto derivatives exchange. Traders appear bullish heading into the expiry, as the max pain price remains well above the current price at $90,000, with the put-call ratio standing at 0.56, showing more calls than puts.
Options allow traders to lock in prices now for future buying or selling, and the expiry could influence Bitcoin’s price action next week, especially if the Fed signals easier monetary policy.
Also Read: Bitcoin May Surge if Fed Intervenes in Yen, JGB Markets: Arthur Hayes
