Bitcoin is teetering on the edge of a cliff. The $80,000 level is the last lifeline before a potential plunge, and if it doesn’t hold, a tidal wave of liquidations—over $1.13 billion worth—could come crashing down, according to CoinGlass data. The latest sell-off stems from disappointment over President Donald Trump’s Strategic Bitcoin Reserve executive order. Instead of loading up on fresh BTC, the U.S. government is simply repurposing seized assets. According to Bitfinex analysts, this “dampened expectations” and drained short-term momentum from the market.
Billions Are Pouring Out of Crypto
Institutional investors aren’t sticking around to see how this plays out. Crypto exchange-traded products (ETPs) just suffered their fourth consecutive week of outflows, with another $876 million yanked from the market, per CoinShares. In just a month, total outflows have hit $4.75 billion, dragging year-to-date inflows down to $2.6 billion. Bitcoin ETPs alone accounted for 85% of last week’s outflows, a stark reminder that big-money players are getting cold feet.
Inflation and Rate Hikes Shake Bitcoin’s Fragile Balance
It’s not just crypto’s own drama fueling this uncertainty. Traders are bracing for key U.S. economic data, including inflation numbers and a job openings report. Nexo analyst Iliya Kalchev told Cointelegraph that Bitcoin’s next move is now “heavily influenced by macroeconomic factors.” If inflation runs hot, it could crush hopes for near-term Federal Reserve rate cuts—making risk assets, including Bitcoin, even less appealing.
Will Bitcoin Hold the Line or Fall Further?
If Bitcoin slips below $80,000, things could get ugly fast. But there’s a glimmer of hope. Rekt Capital points out that Bitcoin’s relative strength index (RSI) is flashing oversold conditions, historically a signal for a rebound. Each time Bitcoin hit these levels in this cycle, it was either at the bottom—or just a few percentage points away.
For now, Bitcoin is on thin ice. A close above $82,000 could steady the ship. A drop below $80,000? That could open the floodgates. At the time of writing, Bitcoin is sitting at $80,438.26.
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