The BTC price is facing renewed selling pressure, with prices sliding to a multi-week low amid heightened volatility. The move followed a sharp reversal from recent highs and reflected weaker risk sentiment driven by macroeconomic signals, geopolitical developments, and heavy liquidation activity across crypto markets.
BTC Price Hits Six-Week Low on Geopolitical and Fed Pressure
Bitcoin price dropped more than 5% on Thursday to $84,564, its lowest close since December 19. The drop followed Bitcoin trading at nearly $90,400, less than a day earlier, highlighting the rapid nature of the reversal. The asset is now well below its all-time high (ATH) of $126,000. Losses extended beyond Bitcoin to the broader crypto market. Ethereum, Cardano, XRP, and Solana all fell by at least 6% or more. Selling pressure increased as prices moved below short-term support levels.
Market stress wascompounded by geopolitical risk. According to a report, the United States was sending a second warship to the Middle East. Iran also declared that it had begun preparations for fresh military exercises in the vicinity of the Strait of Hormuz. Global markets remained under pressure from such events, with increased buying amid defensive positioning.
The BTC price drop was also a function of macroeconomic conditions. The Fed left interest rates between 3.50% and 3.75%. Federal Reserve officials signaled that they were in no rush to cut interest rates, noting that the labor market was stabilizing and inflation remained somewhat elevated.
How Leverage Unwinds Fueled Bitcoin’s Sharp Selloff
In an X post, analyst BLAZEY highlighted that it is a “classic leverage flush.” According to the analyst, over-leveraged longs with leverage ratios around 2.2:1 were sold off sharply. In an hour, about $150 million in liquidations took place. Low liquidity exacerbated price swings in the selloff.
However, the daily trading volume of Bitcoin rose to around $49 billion as forced selling intensified. The total BTC price market capitalization slid to about $1.69 trillion, a 5.2% decrease from the previous day.
Liquidation data showed the magnitude of the move. According to CoinGlass data, nearly $319.25 million was liquidated for top crypto assets in the last 24 hours. Long positions represented over $307.59 million of that total, while short liquidations stand at $11.66 million. The imbalance indicated bullish exposure concentrated ahead of the decline.
It is worth noting that the BTC price decline also comes despite new highs in stock markets and commodities such as gold and silver. JPMorgan analysts attributed the decline in Bitcoin to short-term capital flows and market sentiment.
The Bitcoin ETFs have seen significant outflows over the last few days, with these funds recording net outflows in seven out ot the last eight trading days. As a result, these funds have now recorded a net outflow of $278 million this month and are on course to end this month in the red.
