Bitcoin has fallen to a nine-month low of around $81,000, extending a steep correction that has now erased approximately 35% of its value from record highs, sending shockwaves through an already cautious crypto market.
The downturn sparked a surge in forced liquidations, with traders rapidly cutting exposure as geopolitical tensions rose and fresh economic and policy risks emerged from the United States.
In early Friday trading, Bitcoin briefly slipped to $81,058 on Coinbase, its weakest level since April. The move marks a sharp reversal from October, when prices surged above $126,000, fuelled by optimism that has since faded amid worsening global risk sentiment.
$1.68bn Liquidated as Leverage Fuels the Sell-Off
Figures from CoinGlass show that roughly 270,000 traders were liquidated in the last 24 hours, with total losses amounting to $1.68 billion.
About 93% of those liquidations were long positions, largely tied to Bitcoin and Ether, underscoring how leveraged bullish trades were overwhelmed by the pace of the decline.
Such dynamics have become typical during sharp market pullbacks. Once prices breach key technical levels, automatic liquidations intensify selling pressure, often pushing prices well below levels supported by normal spot buying.
Bitcoin is now trading near a key monthly support zone, an area that has historically acted as a turning point during major market cycles.
Crypto Market Sheds $200bn in a Single Session
The sell-off was not limited to Bitcoin. The total cryptocurrency market lost an estimated $200 billion in value in one day, reflecting broad-based risk aversion.
Altcoins suffered deeper losses, as thinner liquidity exacerbated declines. During periods of market stress, capital typically retreats from smaller tokens into more liquid assets, worsening volatility across the sector.
Macro and Geopolitical Risks Drive Bitcoin’s Decline
Unlike previous crypto downturns triggered by internal industry failures, this correction has been driven largely by external macroeconomic and geopolitical forces.
A combination of policy uncertainty and escalating geopolitical risk weighed heavily on markets. US President Donald Trump announced plans to unveil his next Federal Reserve Chair nominee, unsettling expectations around future interest rate policy.
At the same time, the US moved to deploy additional naval assets to the Middle East as tensions with Iran intensified, injecting fresh uncertainty into global markets.
Addressing reporters, Trump remarked: “We have a lot of very big, very powerful ships sailing to Iran right now, and it would be great if we didn’t have to use them.” Markets interpreted the comments as a signal of rising conflict risk, prompting a pullback from risk assets.
Trade Policy Uncertainty Weighs on Investor Confidence
Further pressure came after Trump declared a national emergency and signed an executive order threatening tariffs on countries trading oil with Cuba.
The move reinforced fears that trade tensions are resurfacing, adding another layer of unpredictability to global markets. As a result, investors moved aggressively to de-risk across asset classes.
Even traditional safe havens struggled. Gold has dropped 9% from its recent peak near $5,600 per ounce, while silver is down more than 11%, suggesting widespread deleveraging rather than selective risk rotation.
Tech Stock Sell-Off Spills Into Crypto
US technology stocks also contributed to the risk-off mood. Microsoft shares fell 10% on Thursday, their sharpest one-day decline since March 2020.
The drop followed earnings results that showed record capital expenditure alongside slower cloud growth, raising concerns about margins and growth sustainability across the tech sector.
Given Bitcoin’s growing correlation with high-growth equities, weakness in big tech quickly spilled over into digital asset markets.
Market Outlook: Volatility Set to Remain Elevated
Bitcoin’s latest slide appears less a reflection of weakening fundamentals and more a consequence of a broader global deleveraging cycle.
When leverage is high and liquidity tightens, correlations between assets tend to increase. Until geopolitical risks subside and confidence returns to wider financial markets, heightened volatility is likely to remain a defining feature of crypto trading.
