Bitcoin Drops Below $81K as Crucial Support Level Breaks

The Support Line Finally Gives Way

For nearly two full months, crypto traders relied on BitcoinBTC-1.14%'s 50-day moving average as a trusty floor. Every time the price dipped near that line, buyers stepped in to push it right back up.

That streak came to an end on Friday, October 24. Bitcoin closed its daily candle below that key technical indicator for the first time since August.

Bitcoin slipped to around $80,698 to $80,800, marking a daily decline of about 1%. With the 50-day average sitting near $81,784, that former floor has now turned into a resistance level sitting roughly $1,000 above current prices.

Traders often view reclaiming the 50-day average as a sign of strength. Losing this support level serves as a notable warning signal for the market.

What Sparked the Sudden Market Downturn?

Geopolitical developments appear to be the primary spark for this price drop. On Friday, President Donald Trump publicly noted that "we may do another operation against Iran."

Media outlets quickly linked his comments to a potential operation, referencing Operation Epic Fury launched against Iran in late February.

These comments rattled traditional financial markets that were already feeling anxious. The Dow Jones Industrial Average dropped 652 points on Friday, while nearly three out of four stocks in the S&P 500 closed in the red.

Crude oil prices pushed toward $120 a barrel, and the Nasdaq index pulled back by 8%. Analysts estimate that roughly $140 billion was wiped off the total crypto market cap over the past week.

Massive Liquidations and Record ETF Outflows

High leverage in the derivatives market made the sell-off sharper. Data from Whale Insider revealed that $318 million in long positions were liquidated across crypto in 24 hours.

Looking at broader Coinglass data, a total of 175,527 traders were liquidated for a combined $495.74 million. The single largest liquidation order was a $4.77 million EthereumETH-1.10% position on Binance.

Spot market investors also moved to the sidelines. On Thursday, U.S. spot Bitcoin ETFs recorded $635 million in net outflows—their largest single-day exit since June—led by BlackRock and Fidelity products.

ETF issuers sold an additional $137.94 million worth of assets on Friday, adding extra pressure to spot prices.

Key Macro Events on the Horizon

Traders are closely watching several major economic and political dates coming up over the next week:

• October 27: Israel's national election
• October 28: Federal Open Market Committee (FOMC) rate decision
• October 29: U.S. Personal Consumption Expenditures (PCE) inflation print
• Upcoming: U.S. Big Tech quarterly earnings reports

Analyst Benjamin Cowen outlined a scenario where Bitcoin could experience further downside. He noted that if Bitcoin closes the week below $83,000 alongside hawkish Fed commentary, hot PCE inflation data, and oil reaching $120, prices could slide deeper.

Conversely, Cowen highlighted that this bearish setup is invalidated if Bitcoin reclaims and holds above $83,000. Investors should monitor these macro factors closely as market conditions remain fluid.

Market Sentiment and Current Outlook

Technical momentum gauges have cooled off significantly following recent swings. The Bitcoin Bull Score Index recently dropped from 80 down to 60.

Despite the drop, market views remain divided. Some traders consider the current pullbacks to be a favorable buying zone and are gradually adding to existing positions.

As always, cryptocurrency markets remain volatile and sensitive to global macroeconomic shifts. Past returns of digital assets do not guarantee future performance. You can check updated market stats anytime on Bitkub Market.