Bitcoin fell below $81,000 on Friday. This was the lowest level since April. The drop came as traders were forced to sell and big institutions pulled their money out. Because of this, a very important price level came under threat. If that level breaks, it could lead to even more forced selling across the entire crypto market.
Bitcoin reached $80,548 at its lowest point. It then moved back to around 85,700. The small gains Bitcoin made this year have almost vanished. The market now looks very shaky. High leverage and fast automated trading make every small fall much worse.
If Bitcoin goes below eighty thousand, months of support will disappear. This could trigger billions of dollars in forced selling. It may even spill into the stock market.
The eighty thousand mark is not just a number. It is a strong floor that has held many times this month. If it breaks, it would undo months of buildup and show that a strong downtrend has begun. That could push Bitcoin toward the $75,000 range, which was the support area seen last year.
Volatility has shot up as well. The Bitcoin Volatility Index is now at fifty point three two. This means the market is extremely uncertain and reacts sharply to even small news.
Earlier this week, Bitcoin fell below $92,500. This price had been a key support but has now turned into resistance. Once Bitcoin stays below that level, analysts believe the next target is eighty-four thousand. This level has already been tested during the day. Below that is the danger zone. If eighty thousand breaks, a fast fall toward seventy thousand becomes very likely.
Open interest in Bitcoin futures has also dropped by thirty five percent from its October peak of ninety-four billion dollars. This shows that many leveraged traders are already giving up, even before big investors start selling.
The bigger worry is not just Bitcoin falling. It is how this fall could spread into stocks. Bitcoin ETFs saw heavy outflows in November. Spot Bitcoin funds in the US lost two point nine billion dollars. BlackRock’s IBIT alone saw two point one billion in withdrawals. On one single day last week, IBIT lost five hundred twenty three million dollars. This shows that even big institutions are pulling back because of uncertainty around the Federal Reserve.
Bitcoin has also become more tied to the Nasdaq. The correlation has reached zero point eight. This is very high. Bitcoin falls harder when stocks fall. But when stocks rise, Bitcoin rises much slower. This shows Bitcoin is now acting like an extra risky version of tech stocks rather than its own independent asset.
If stocks fall again, Bitcoin could fall even faster.
The Fed’s unclear message about rate cuts in December has taken away the boost that helped crypto earlier. The latest jobs data was mixed and did not give the Fed a clear direction. Because of this, traders cut the chances of a December rate cut to forty six percent.
With no support from the Fed and with giant investors pulling money out, Bitcoin is running out of cushions. If the eighty thousand mark breaks, we may see fast selling across altcoins and crypto related stocks. This could also test whether the stock market can stay steady or whether it falls alongside crypto.