The latest crypto news reveals a tense showdown at a critical price level. Bitcoin price is undergoing a severe stress test, battling to hold the vital $85,000 support level after a sharp 4% drop. This volatility comes amid a surge in market-wide liquidations exceeding $650 million, all as traders brace for high-impact U.S. economic data.
The bellwether cryptocurrency tumbled from over $89,000 to briefly touch $85,427, marking a 9% decline from last week’s peak. At press time, BTC was fighting to consolidate near $85,798, with the entire market holding its breath.
Macro Jitters Trigger Crypto Sell-Off
The catalyst for this downturn, according to the latest crypto news and analysis, is mounting investor caution ahead of key U.S. jobs data. The non-farm payroll report is a critical gauge for the Federal Reserve’s interest rate policy—a primary driver for digital asset valuations.
While a softening labor market could signal future rate cuts (typically bullish for crypto), the Fed’s recent communication has been hawkish. After a mere 0.25% cut last week, officials hinted at only one further reduction through 2026. This uncertainty has triggered profit-taking and a flight from risk, directly impacting Bitcoin price.
The Liquidation Cascade: By the Numbers
The volatility sparked a domino effect in the derivatives market:
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Total Market Liquidations: $653.4 million in the past 24 hours.
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Long Position Pain: A staggering $576.6 million of that came from liquidated long contracts.
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Bitcoin’s Share: BTC futures alone saw $169 million in long liquidations.
This flushing of leverage is evident in the dropping Open Interest in Bitcoin futures, now at $59.8B—a significant decline from October’s highs above $94B.
Institutional Winds Shift
Adding to the selling pressure, the latest crypto news on institutional flows shows a concerning trend. U.S. spot Bitcoin ETFs have recorded net outflows of $158.8 million in December, continuing November’s multi-billion dollar withdrawal pattern. This reduction in institutional demand is removing a key pillar of support that fueled the 2024 rally.
Market commentators like DeFiTracer point to potential coordinated selling, noting nearly $2 billion in BTC sales from major exchanges and whales yesterday, which may have ignited the downturn.
Source: X/DeFiTracer
Analysts Divided on Next Move
The sentiment in the crypto market is undeniably fearful, with the Crypto Fear & Greed Index deep in “Extreme Fear” territory at a reading of 11.
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Bearish Case: Kadan Stadelmann of Komodo Platform warns that in the short term, Bitcoin price could retreat toward $75,000 if selling pressure persists.
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Bullish Support: Conversely, analyst Ted Pillows highlights substantial buy orders stacked between $80,000 and $85,000 on major exchanges like Binance, suggesting strong support could hold.
The Bottom Line
This latest crypto news event is a stark reminder of the market’s sensitivity to macroeconomics and leverage. While the long-term bull run thesis remains intact for many, the path forward is likely marked by heightened volatility.
Key Levels to Watch:
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Support: A firm hold above $85,000 is critical. A break below could target $80,000.
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Resistance: Reclaiming $89,000 and then the $90k psychological level is needed to restore bullish momentum.
Traders should manage risk carefully, and investors might see this pullback as a potential accumulation zone within the larger market cycle. Stay tuned for more latest crypto news and analysis as the situation develops.
