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Bitcoin plunged below $81,000 on Friday, its lowest since April, as liquidations and institutional outflows threatened to break a key technical level, risking widespread forced selling in crypto.

The world’s largest cryptocurrency dipped as low as $80,548 before stabilizing near $85,702, erasing what little remained of its year-to-date gains and signaling fragile support in a market where leverage and algorithmic trading have amplified every downward tick.​

A decisive break below $80,000 would erase months of support, likely triggering billions in liquidations, amplified by leverage and threatening spillover into equities.

Bitcoin technical support at $80,000 is under siege

Bitcoin’s $80,000 level represents far more than a psychological barrier; it’s a structural floor that has held after multiple tests this month.

A breakdown invalidates months of technical accumulation and signals a potential bearish reversal that could cascade toward $70,000–$75,000 support zones established during late 2024.

The Bitcoin Volatility Index has surged to 50.32, reflecting market uncertainty at dangerous levels where even minor catalysts trigger violent swings.​

Technical analysis confirms the fragility. Bitcoin fell below the critical $92,500 resistance level earlier this week, which has now flipped to resistance rather than support.

Once that level breaks decisively, analysts warn the next downside target becomes $84,000, a level already tested intraday.

Below that lies the red zone: $80,000, and if that fails, rapid capitulation toward $70,000 becomes probable.

Open interest in Bitcoin futures has already plummeted 35% from October’s $94 billion peak, signaling capitulation among leveraged players before the big money has even started unwinding.​

Leverage, ETF flows, and Fed signals will decide if contagion spreads

The real danger isn’t Bitcoin’s isolated decline; it’s the structural triggers that could amplify into equities.

Bitcoin ETF outflows accelerated sharply: US-listed spot Bitcoin products lost $2.9 billion in November, with BlackRock’s IBIT accounting for $2.1 billion of redemptions.

On a single day last week, IBIT shed $523 million, a record outflow that reflects institutional capitulation amid uncertain Federal Reserve policy.​

More troubling: Bitcoin’s correlation with the Nasdaq has hit a 0.8 level, dangerously high and asymmetric.

Bitcoin falls harder than the Nasdaq on down days but lags during rallies, acting as a “high-beta tail” of risk sentiment rather than a standalone asset class.

This means if equities roll over sharply, Bitcoin will amplify the carnage.​

The Fed’s ambiguous December rate cut messaging has evaporated the risk-on tailwind that supported crypto valuations.

Mixed September jobs data (119,000 payrolls added, 4.4% unemployment) left policymakers without clear guidance, prompting traders to dial back December rate-cut odds to 46%.

Without Fed support and facing redemptions from institutional players, Bitcoin has nowhere to hide.​

If $80,000 fails, expect cascading liquidations to drag altcoins and crypto-linked equities lower, and potentially test whether equities decouple or join the retreat.

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