The price of Bitcoin during trading fell below the psychological support level of $80,000. The asset updated a nine-month low, losing support at the True Market Mean level ($80,500).
The technical breakout caused a large-scale reduction in the share of borrowed funds in the market. Over the past day, the volume of liquidations of traders' positions amounted to $2.58 billion. This is evidenced by data from analytical platforms.
Loss of key support levels
The current price dynamics have pushed quotes beyond critically important on-chain metrics. According to the Glassnode report, Bitcoin is trading below the True Market Mean level for the first time in the last 30 months. The last time such a deviation was observed was in late 2023 when the asset's price was $29,000.
Historically, a drop below this level is seen as a signal to transition from a bullish cycle to a medium-term correction period. Currently, asset holders are facing negative market conditions: the buying price of short-term holders (Short-Term Holder Cost Basis) reached $95,400, and the average figure for active investors is $87,300.
Since the spot price is significantly below these values, a significant volume of unrealized losses has formed in the market.
Wave of forced position closures
The sharp decline in the exchange rate led to a cascade of liquidations on derivative exchanges. According to CoinGlass, the total amount of losses amounted to $2.58 billion.
The main blow fell on buyers: long positions totaled $2.42 billion from the total liquidation volume. This event became the largest in scale over the last three months.
The largest losses were recorded in pairs with Ethereum — $1.15 billion. Losses for traders trading Bitcoin exceeded $772 million. Such a massive 'long squeeze' indicates excessive leverage used to defend the $80,000 level.
Reasons for the depletion of market activity
CryptoQuant CEO Ki Young Ju links the current decline to a liquidity shortage on the part of buyers. This is indicated by the stagnation of realized capitalization (Realized Cap). The metric confirms that the influx of new capital necessary for continued growth has essentially ceased.
The specialist believes that the market will transition to a prolonged consolidation phase within a wide range until a new sustainable support level is formed. At the same time, he ruled out the likelihood of a 70% drop, characteristic of past cycles, as long as large institutional holders maintain their positions.
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