Bitcoin drops below $84,000 as $280M in leveraged bets are wiped out
Bitcoin correction triggers mass liquidations
Bitcoin (BTC) fell below $84,000 on Wednesday, marking a significant dip in price. The drop triggered the closure of leveraged trading positions worth $280 million over a four-hour period. This event occurred as the cryptocurrency struggled to maintain momentum near the $87,000 level.
Data from TradingView shows that Bitcoin attempted to break above $87,000 for a second time. However, the price was rejected and fell into the local lows just before the US stock market opened. The price movement stayed within a narrow range between $84,000 and $87,000 before the sharp decline.
Key market metrics
- Bitcoin briefly traded under $84,000, its lowest point this week.
- Traders with leveraged bets that the price would go up lost $280 million in four hours.
- Cumulative spot demand for Bitcoin has been negative over the last 30 days.
- US spot Bitcoin exchange-traded funds (ETFs) have an average purchase price just below $86,000.
Support levels and analyst views
Market analyst Rekt Capital noted that $82,000 is a critical support level. He stated that if Bitcoin falls below this number, it could return to a trading range between $60,000 and $80,000. For the current upward trend to continue, the price needs to stay above or retest the $82,000 mark.
Other analysis had previously pointed to $90,000 as the next area where the price might stabilize. This view was based on the expectation that traders would sell their coins to take profits as the price rose.
Weak spot demand signals risk
Despite a price increase of over 35% since mid-August, Bitcoin is facing difficulties attracting buyers in the direct spot market. Onchain analytics platform CryptoQuant reported that interest has largely shifted to futures contracts, which are bets on future prices.
CryptoQuant data showed that the cumulative apparent spot demand for Bitcoin was -180,000 BTC as of Tuesday. This negative value means that more Bitcoin was moved out of exchange wallets than moved in over the last 30 days, indicating a lack of buying pressure from new investors.
The platform noted that while total demand remains negative, the trend is slowly shifting toward the positive. They warned that a sustained move into positive spot demand would likely signal the start of a larger rally.
Why this matters for investors
The current price action highlights a disconnect between the price of Bitcoin and the demand from direct buyers. The heavy reliance on leveraged futures to drive price movement has left the market vulnerable to sudden drops. Additionally, many investors who bought Bitcoin through spot ETFs are currently underwater, as the current price is below their average cost basis of $86,000. This creates potential selling pressure if the price does not recover.
Source
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.