Bitcoin Price Drops Below $81K as Crypto Liquidations Top $1.1 Billion

Key Takeaways

Middle East Tensions and Oil Surge Pressure Crypto

Bitcoin (BTC) price dropped below the $81,000 threshold on Thursday amid a marketwide sell-off that saw several altcoins log daily losses exceeding 5%. The retreat coincided with a surge in Brent crude oil to $105 a barrel following reports of fresh attacks on shipping vessels in the Strait of Hormuz, and revelations that the U.S. is contemplating resuming strikes on Iranian targets.

The price of BTC collapsed to an intraday low of $80,507 after shedding more than $1,500 in one hour. Hours earlier, the cryptocurrency had been struggling to hold the $83,000 support level established late Tuesday after plunging from $85,000. In fact, the cryptocurrency has been bleeding since its failed attempt to breach the $87,000 level on Oct. 6.

The cryptocurrency was recently trading approximately 3% below its Oct. 1 opening price of more than $84,200. This reversal also saw bitcoin’s market capitalization plunge from $1.74 trillion on Monday to just above $1.62 trillion as of this writing.

Over $1 Billion Liquidated Across the Crypto Economy

Meanwhile, bitcoin’s downtrend again left traders with overleveraged long positions licking their wounds. As shown by Coinglass 24-hour data, about $270 million in long bets on the cryptocurrency had been liquidated at the time of writing. Overall, liquidations across the crypto economy reached $1.14 billion, with ether (ETH) being the crypto asset with the largest combined liquidations at $333 million.

While escalating tensions in the Middle East potentially helped drive down the market, social media speculation focused on a potential sale of coins seized from the Bitfinex hacker, which the U.S. government recently moved to Coinbase Prime. However, analysts note there is no evidence the $1 billion in bitcoin has actually been sold, suggesting other catalysts are behind the downturn.

Meanwhile, some market observers, including Ted Pillows, are warning that regardless of U.S. government sales, the BTC price will likely fall further. In a post on X, Pillows said:

“BTC is expected to hit $78,000 this month. The US government is transferring out a huge amount of BTC, and this could create panic. But now all eyes will be on the $81,500-$82,000 level. Losing this, and Bitcoin could drop as low as $75,000 before any strong uptrend.”

Another social media commentator suggested that BTC could drop even further if the $81,000 neckline breaks with conviction. They added that while the market expects a V-shaped recovery, “Bitcoin might have other plans.”