With the Bitcoin price losing multiple key support areas and printing multi-month lows on Friday, traders are concerned that the flagship cryptocurrency may be positioned for further downside.
Bitcoin fell to an intraday low of $81,314 today as the market reacted to macro headwinds out of the United States.
Why is Bitcoin price falling?
Tensions in the Middle East are causing market-wide panic, and Bitcoin is bearing the brunt of it, as it is often the first risk asset to react to macroeconomic shocks.
“We view the current crypto market downturn as primarily driven by heightened risk aversion amid escalating geopolitical crises, where investors are preferring traditional safe havens over volatile digital assets,” said Gracy Chen, CEO at Bitget.
On Thursday, the US dispatched another warship to the Middle East amid the country’s rising tensions with Iran, sparking fears of a broader regional conflict.
Making matters worse, President Trump declared a national emergency and signed an executive order imposing tariffs on any goods coming from countries that supply oil to Cuba.
The US administration has already issued strong warnings in response to Cuba’s military ties with Russia and China.
Simultaneously, renewed US-Iran friction and threats of retaliation in the region have spooked investors.
Meanwhile, the probability that President Trump will nominate Kevin Warsh as the next Federal Reserve Chair has surged.
Warsh is widely viewed as more hawkish than other frontrunners, and his potential appointment sent the US Dollar Index sharply higher, which immediately weighed on Bitcoin and other dollar-denominated assets.
Risk assets were also hit hard by broader market stress following disappointing tech earnings.
Microsoft’s Q2 2026 report, released late Wednesday, showed revenue and profit beats, but concerns over record spending and slowing cloud growth triggered a sharp sell-off.
Microsoft shares fell nearly 12% on Thursday, marking the steepest one-day drop since March 2020.
As Bitcoin fell toward the $81,000 mark, total liquidations surged to $1.7 billion in the past 24 hours, with nearly $1.6 billion coming from long liquidations.
Bitcoin alone accounted for over $785 million in liquidated positions during that span.
Chen added that “such corrections can be constructive, flushing out excess leverage and resetting market positioning in a way that supports healthier price discovery over the medium term.”
Bitcoin risks a crash below $80,000
Bitcoin bulls failed to defend the $85,000 support level, which has acted as a critical price floor over the past months, offering a base for multiple recovery attempts during previous downturns.
This has now brought attention to the $80,000 support area, which stands as the only line of defence before deeper downside risks open up.
As this is an important psychological support, failure to defend this level could severely dent trader confidence and trigger a fresh round of panic-driven sell pressure.
According to Bitcoin’s 24-hour liquidation heatmap from Coinglass, a significant pool of long liquidations can be observed between the $80,000 and $78,000 range on the downside. See below.
If Bitcoin price slides below $80,000, it could trigger another round of cascading liquidations as traders are forced to exit underwater positions.
Below $78,000, the map shows relatively thinner liquidity bands, suggesting that the move could accelerate sharply with limited resistance until deeper supports are tested.
On the upside, heavy liquidation activity is visible in the $84,000 to $86,000 region, showing that many short positions are concentrated there.
If Bitcoin were to reclaim $84,000, it could start forcing those short sellers to cover, potentially triggering a short squeeze.
However, unless Bitcoin breaks through that resistance zone with meaningful volume and macro tailwinds, any bounce is likely to be capped in the short term.
According to veteran trader and analyst Peter Brandt, Bitcoin has completed a bear channel, which is considered a major sell signal.
Based on the BTC/USD chart shared by the analyst, Bitcoin could slip as low as $66,800 as part of an extended correction if it fails to hold the support level at $81,852.
However, this outlook would be invalidated if Bitcoin manages to reclaim the $93,000 mark.
Fellow analyst Rekt Capital, in a recent analysis, warned that a breakdown below $82,500 would “confirm Bearish Acceleration.”
At the time of publication, the Bitcoin price was trading around this level.
In a subsequent post, the analyst noted that a successful reclaim of the $86,000 could alleviate some bearish pressure in the short term.
“Bitcoin needs to avoid turning the Range Low of $86k into new resistance on the lower timeframes and muster a Weekly Close above said level to rescue itself from a breakdown,” the analyst wrote.
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