Bitcoin Dips Below $80K as Crypto Market Sees $700M Liquidation Crash

Bitcoin (BTC) tumbled 4.5% below $80,000, triggering a market-wide sell-off that erased $700 million in long positions. Dogecoin (DOGE) and Ethereum (ETH) plummeted 9%, while Solana (SOL) and XRP shed 8% and 7%, respectively. The broader CoinDesk 20 index fell over 6.5% as investors adopted a risk-off stance.

Leveraged traders faced heavy losses, with BTC longs suffering $420 million in liquidations, ETH at $150 million, and DOGE at $30 million. BTC futures open interest dropped 7% to $45 billion, reflecting margin calls and forced liquidations.

Investor sentiment soured as the Federal Reserve’s rate-cut outlook dimmed after a strong jobs report. Analysts expect traders to stay cautious until clearer economic signals emerge. Global uncertainty deepened as U.S. stock markets slumped—the S&P 500 fell 2%, Nasdaq dropped 3%, and the "Magnificent 7" lost $830 billion in market cap. Concerns over upcoming U.S. trade tariffs and recession fears following Donald Trump's recent remarks further rattled markets.

A strengthening U.S. dollar and hawkish Fed stance have pressured crypto, with investors turning to safe-haven assets like gold and the Japanese yen. However, the Crypto Fear & Greed Index sits at 15, deep in “extreme fear” territory, suggesting potential for a relief rally.

Singapore-based QCP Capital noted that falling Treasury yields and dollar weakness could signal short-term opportunities. Lower yields reduce U.S. borrowing costs, aligning with Trump’s policy plans for tax cuts and expansionary fiscal measures. While risks remain, some indicators hint at a possible market rebound.