Bitcoin Plummets to near $80,000 Amid Broad Market Sell-off
New Yorkโ – Bitcoin experienced a sharp decline on Monday, โฃfalling to a low of approximately $80,000โ as a confluence of factors triggered a widespread sell-off in the cryptocurrency market. The drop continuesโข a period of volatilityโ for the digital โasset, โขwhich recently reached all-time highs near $73,750.
The recent downturn is attributed to a combination of macroeconomic pressures, technical factors, โand diminished liquidity,โข according to industry โฃanalysts. Concerns surrounding Federal Reserve โขinterest rate policy, a cooling โlaborโ market, and a โฃbroader “risk off” sentiment โคin the technology sector – fueled by high valuationsโค in artificial intelligence stocks – are โฃall contributing toโ the downwardโ pressure. Theโค potential for a U.S. government shutdown hasโ also added to investor uncertainty.
“A likely blend โฃofโ factors has put bitcoinโข into this seeming โspin cycle including fed rate sentiment, laborโค market, general tech ‘risk off’ mood fostered by frothy โฃAI multiples and a dash of margin โcalls toโข boot,” stated Bitwise Asset Management in an email.”The government shutdown backdrop โฃhas also โขnot helped.”
Experts emphasize thatโค meaningful โฃpullbacks are characteristic of Bitcoin’s history and encourage a long-term investment outlook. “It is vitalโฃ to โkeep inโฃ mindโ that pull backs of this magnitude โare on brandโ for bitcoin and betterโค to focus โon the long โterm holdโฃ fundamentals,” Bitwise added.
Further exacerbatingโฃ the declineโ is a reduction โin market liquidity, notably heading intoโข theโ holiday โขweek, and the unwinding of leveraged positions. Matt Williams, head of financial services at Luxor, โขnoted that “Liquidity continues to dry up due to bearish sentiment, whichโข is exacerbated heading into the holiday week when liquidity historically shrinks anyway.” He also โคreported “moreโ forced โขliquidations amongst โคparticipants that took โon long positions โaround $90k,” and rumors – yet โunconfirmed – of large crypto market makers liquidating ample long Bitcoin derivatives positions.
David Brickell, head of internationalโ distribution for FRNT, โขcharacterized the losses as a โcontinuation of trends observed โคin recent weeks. He pointed to โpressure โon โคthe technology sector,โฃ evenโ following strong โearnings from โNVIDIA, and continued tightness in U.S. funding markets. “key fundingโ rates are still elevated, even as the TGA begins to draw down, which is limiting the usual relief that would follow a fiscal liquidity โฃinjection,” Brickell โขstated via Telegram, โreferring to โขthe Federal Reserve’s Treasury general Account. He added that breaking through key technical levels triggered systematic selling strategies, leaving the market “without a natural bid” due to the โฃcombination โขof tighter liquidity, systematic selling,โข and โa lack of new bullish catalysts.
