3 Key Events That Pushed Bitcoin Toward $80,000

Bitcoin's downward moves, which began at the start of last week's trading, peaked this morning, with the price falling on most exchanges to near $80,000. This sharp drop marks a retest of this key support roughly a month later. Traders are concerned about losing key levels […]

The bearish movements of Bitcoin, which started at the beginning of last trading week, finally reached its peak this morning and the price of this asset fell to close to $80,000 on most exchanges. This heavy decline means a retest of this key support after about a month.

Traders' concern about losing higher price levels has intensified and heavy selling pressure has overshadowed the entire market. Next, relying on a report from CryptoPotato, we will examine the three main factors that drove this sudden drop and determine the short-term fate of the market.

The falling dominoes of Asian markets; Did Tom Lee's warning come true?

Bitmine CEO Tom Lee warned this week that the collapse of Asian stock markets could trigger a new bearish wave in the digital currency market. At the time, South Korea's stock market was down about 5 percent, and Japan's Nikkei 225 fell to 67,130 on Tuesday from 69,000 on Friday.

Despite the efforts of Asian markets to offset some of this decline, the selling pressure intensified again in the last 24 hours. Japan's Nikkei index fell by about 6 percent and reached 64,130 points from 68,375 points. This index then recovered slightly and returned to 64,685 units at the time of publication of the report.

The situation of the South Korean stock market was even more worrying. The Caspian index, which was in the range of 6,800 units last Thursday, first fell to 6,000 units. After a brief return to 6,250 points, this index fell again and reached 5,550 points. In this way, Kospi lost more than 18.5% of its value in five days and almost 8% in the last 24 hours.

Therefore, a further drop in the price of Bitcoin during Asian trading hours was not an unexpected event. The recent bearish wave took place just a few hours ago and pushed Bitcoin to a monthly low of $80,200.

US inflation data and capital outflows from ETFs The release of US inflation data also put more pressure on the digital currency market. September's consumer price index (CPI) came in higher than economists expected, fueling concerns about another interest rate hike. Usually, such conditions end up at the expense of high-risk assets such as Bitcoin.

Immediately after the publication of this report, the price of Bitcoin fell by more than a thousand dollars. At the same time, the probability of an interest rate hike by the Federal Reserve in the October meeting increased from 20 to 25% to 50%.

Eugenio German, the chief economist of Raymond James Company, said: This statistic shows that the increase in prices has spread to more parts of the economy. Such a situation is not good news for the Federal Reserve and increases the possibility of an interest rate hike at the end of October meeting.

The impact of these developments was also seen in spot bitcoin ETF funds. These funds recorded net inflows of $175.62 million on Tuesday, but saw net outflows of $261.46 million after the inflation data was released, according to Soso Value data. This sudden change indicates a decrease in investor demand and an increase in selling pressure in the market.

The liquidation of nearly 1 billion dollars of leveraged transactions, the market collapse was not limited to Bitcoin, and altcoins also faced a sharp drop in price. Ethereum was one of the currencies that experienced a lot of selling pressure. According to the data, the price of Ethereum fell to the $2,300 range.

Following this fall, traders who had counted on the increase in the price of digital currencies with leverage suffered heavy losses. According to CoinGlass data, more than 960 million dollars of leveraged trading positions were liquidated in the last 24 hours, of which 883 million dollars were related to long transactions.

Ethereum has had the largest share of these losses by registering about 290 million dollars of liquidation. The high volume of leveraged transactions in the market has caused price reductions to lead to the forced closing of more positions and intensified selling pressure.

Bitcoin under selling pressure; Does the price continue to fall?

The sharp drop in Asian stock markets, higher-than-expected US inflation, and capital outflows from ETF funds have increased the selling pressure in the Bitcoin market. At the same time, the extensive liquidation of leveraged transactions has fueled the price drop. In such a situation, Bitcoin has reached the critical range of $80,000 and the continuation of the market trend largely depends on the reduction of sales pressure and the return of buyers.