Bitcoin Falls Below $81,000 as Liquidations Top $1 Billion

Bitcoin fell below $81,000 on Oct. 8 after more than $1 billion in liquidations closed leveraged positions. Elevated Treasury yields and limited spot-market demand reduced expectations that a Federal Reserve pause in October would support cryptocurrency prices.

The decline followed a break below the $81,700-to-$83,300 range, where Glassnode had identified a concentration of long liquidations. Bitcoin also fell through large Binance bids placed between $81,000 and $81,250, according to the analytics firm.

Minutes from the Federal Open Market Committee’s September meeting, released Oct. 7, indicated that most officials viewed another rate increase by the end of 2026 as probable. The minutes left future decisions dependent on incoming economic data, keeping open the possibility of no change at the Oct. 27-28 meeting followed by a later increase.

Federal Reserve Governor Christopher Waller cited futures pricing from Oct. 7 that put the probability of at least one rate increase by December at 85%. The probability of at least two increases by March 2027 was nearly 80%, while the probability of three or more was 33%. Waller indicated that additional increases were probable if economic data matched expectations and that the central bank could skip individual meetings.

The 10-year Treasury yield reached 5.305% on Oct. 8, while the two-year yield rose to 4.821%. Brent crude traded at $104.87 a barrel. Higher bond yields increase borrowing costs for investors and can reduce demand for assets such as cryptocurrencies, even when the Fed leaves interest rates unchanged at one meeting.

Trading activity remained below recent levels during Bitcoin’s decline. Glassnode estimated combined daily volume on spot exchanges and U.S. spot Bitcoin exchange-traded funds at about $6.8 billion, below roughly 90% of readings since January 2024. New money from ETFs, stablecoins and corporate treasury purchases totaled an estimated $4.9 billion. Realized capitalization increased by $12.8 billion in the 30 days through Oct. 7.

The data indicated that much of Bitcoin’s earlier price increase came from existing capital repricing coins, rather than a similar increase in new buying. Glassnode also identified limited spot-market demand available to absorb selling.

The analysis placed Bitcoin’s short-term recovery threshold at $85,500, with higher spot volume needed to confirm a break above that level. Sell orders were concentrated between $86,500 and $86,750. Liquidation positions extended from $87,100 to $95,900, with the largest concentration near $92,000.

The next modeled liquidation cluster was near $75,000. The September consumer-price index report is due Oct. 14, followed by the Oct. 27-28 FOMC meeting and the Fed’s Dec. 8-9 meeting. Bitcoin was down 2.82% over 24 hours and 5.04% over seven days as of Oct. 8, with a market capitalization of about $1.62 trillion.