Bitcoin Drops to $83K as $1.2 Trillion Vanishes
Bitcoin is currently trading around $83,000, marking a severe deepening of a correction that has now reached 30% from its intraday high of over $126,000 recorded in early October. The flagship cryptocurrency has slumped to levels not seen in six months, leading a broader market retreat that has wiped approximately $1.2 trillion from the sector’s total capitalization in just six weeks. This downturn reflects a global flight from riskier assets as investors grapple with fading expectations for monetary easing and concerns regarding valuations in the technology sector.
Macroeconomic data has played a decisive role in shifting market sentiment. The release of stronger-than-expected U.S. employment figures, which showed the economy added 119,000 jobs in September compared to forecasts of just 50,000, has forced traders to recalibrate their outlook for the Federal Reserve. The probability of a December interest rate cut has fallen to roughly 40%, strengthening the dollar and dampening the appeal of speculative assets. This risk-off environment has punished the wider crypto complex, with Ethereum sliding to four-month lows near $2,660 and XRP dropping below the $2.00 mark.
The selloff is being compounded by significant institutional exits. Spot Bitcoin ETFs have seen substantial outflows on all but four trading days this month, totaling nearly $3 billion in withdrawals. This institutional weakness is highly correlated with volatility in artificial intelligence stocks, particularly Nvidia. Market analysts note that traders heavily exposed to the AI boom often hold correlated positions in cryptocurrencies, leading to cascading liquidations when tech valuations come under pressure. Consequently, crypto-linked equities have suffered steep losses, with MicroStrategy falling 11% recently, and miners like MARA Holdings and CleanSpark posting sharp declines. Coinbase is also on track for its longest losing streak in over a month.
Despite the bearish price action, industry leaders maintain a longer-term perspective. Binance CEO Richard Teng has characterized the current volatility as a healthy consolidation period for the industry following a stellar 18-month run. He emphasized that despite the recent drop, Bitcoin is still trading at double its value compared to the start of 2024, supported by the entry of major institutional players like BlackRock. Furthermore, the governance of the exchange remains stable following the U.S. pardon of founder Changpeng Zhao, who retains his status as a controlling shareholder but has not returned to daily operations.
Technical analysis suggests the immediate path forward remains precarious. Bitcoin is currently in oversold territory according to the 14-day relative strength index, but analysts warn that this does not guarantee a rebound. The asset lacks significant technical support until the $85,600 level, which represents a key Fibonacci retracement from the mid-year rally. If sellers push prices below this threshold, the next major floor lies at the one-year low near $74,000. Until the market can break its bearish channel and establish a higher low, traders are expected to continue selling into any short-term rallies.
