Market Rout: Bitcoin Hits 9-Month Low as Liquidations Top $1.6 Billion

Bitcoin Plummets to $81,000 Amid Global Economic and Geopolitical Turmoil

The cryptocurrency market recently experienced a severe downturn, with Bitcoin crashing to its lowest valuation in nine months. Dropping to approximately $81,000 on major exchanges like Coinbase, the flagship digital asset has now retreated 35% from its October peak of $126,000. This sharp decline has been fueled by a combination of escalating geopolitical friction, aggressive U.S. trade policy shifts, and a lackluster performance from the technology sector.

Traders holding leveraged long positions bore the brunt of this volatility. Data indicates that over 270,000 market participants were liquidated within a single 24-hour window, resulting in a staggering $1.68 billion in total losses. Approximately 93% of these forced closures were long positions, primarily centered around Bitcoin and Ethereum, as the sudden price drop caught overly optimistic investors off guard.

Macro Uncertainty and Tariff Threats Weigh on Sentiment

The downward pressure intensified following renewed tensions in the Middle East. News of further U.S. naval deployments near Iran sparked cautiousness across global markets. President Donald Trump underscored the gravity of the situation, noting the presence of powerful military assets in the region while expressing hope that diplomatic dialogue with Tehran might prevent active conflict.

Adding to the market’s anxiety was a newly declared national emergency. An executive order was signed to slap tariffs on any nation supplying oil to Cuba, a move that signaled a more protectionist stance on global trade. This regulatory shift caused ripple effects beyond crypto, as traditional safe havens like gold and silver also saw significant corrections, falling 9% and 11.5% respectively from their recent highs.

The Big Tech Influence: Microsoft’s Earnings Ripple Effect

Industry analysts suggest that the crypto sell-off was also closely tied to a disappointing earnings report from Microsoft. The tech giant’s stock suffered its most dramatic one-day loss since 2020 after reporting surging capital expenditures alongside a slowdown in its cloud division. This “earnings flop” triggered a broader derisking movement, as investors grew wary that the frenzy surrounding Artificial Intelligence might be cooling off.

As the total crypto market capitalization sheds $200 billion in a matter of hours, Bitcoin finds itself testing critical support levels. The convergence of tech sector instability and heightened geopolitical risks has left traders wondering if this is a temporary correction or the start of a more sustained bearish trend in the digital asset space.

What caused Bitcoin to drop to $81,000?

Bitcoin’s decline to $81,000 was caused by a confluence of factors including escalating geopolitical tensions in the Middle East with U.S. naval deployments near Iran, aggressive U.S. trade policies including new tariffs on nations supplying oil to Cuba, and a significant sell-off in the technology sector triggered by Microsoft’s disappointing earnings report. These combined pressures created a risk-off environment that prompted widespread liquidations across the cryptocurrency market.

How many traders were liquidated during the Bitcoin crash?

Over 270,000 traders were liquidated within a single 24-hour period during the Bitcoin crash, resulting in total losses of approximately $1.68 billion. About 93% of these liquidations were long positions, meaning traders who had bet on price increases were forced to close their positions as Bitcoin’s value plummeted. The majority of these liquidations were concentrated in Bitcoin and Ethereum positions.

Is this Bitcoin decline a temporary correction or the start of a bear market?

While Bitcoin is currently testing critical support levels after a 35% decline from its October peak, it’s difficult to definitively classify this as either a temporary correction or the beginning of a sustained bear market. The convergence of multiple negative factors—geopolitical instability, protectionist trade policies, and tech sector weakness—suggests significant headwinds. However, market sentiment can shift rapidly based on developments in these areas. Investors should monitor key support levels, overall market conditions, and whether the identified catalysts intensify or resolve.