Bitcoin News Today: Bitcoin Nears $80K Cliff: $2B Longs Face Liquidity Domino Effect

Bitcoin's liquidation risk has surged as nearly $2 billion in leveraged long positions teeter on the edge of collapse should the cryptocurrency fall below $80,000, according to recent market data. The world's largest digital asset has lost nearly 30% of its value since hitting a record high in October, with institutional and retail demand evaporating amid shifting macroeconomic expectations and technical breakdowns.

The selloff has been exacerbated by massive outflows from Bitcoin spot exchange-traded funds (ETFs), which have seen more than $3 billion withdrawn in November alone. BlackRock's iShares Bitcoin Trust (IBIT), the largest ETF, recorded a record $523 million outflow on November 19 - the fifth consecutive day of redemptions - as investors rushed to cut exposure. According to reports, cumulative net assets for Bitcoin ETFs have dropped to $122.29 billion from a peak of $170 billion in early October, reflecting waning confidence in the asset class. Ethereum ETFs have also faced prolonged outflows, with $74 million exiting on Tuesday alone, deepening concerns about a protracted bearish phase.

Technical indicators paint a grim picture. Bitcoin's price has struggled to hold above $91,000, with a "death cross" forming as the 50-day exponential moving average (EMA) fell below the 200-day EMA - a historically bearish signal. The Relative Strength Index (RSI) has entered oversold territory, suggesting intensifying downward momentum. Analysts warn that a breakdown below $80,000 could trigger a cascade of forced liquidations, echoing the $19 billion in leveraged positions wiped out during the October 10 flash crash.

Leverage and volatility have amplified the risks. Over $2 billion in liquidations occurred in a 24-hour period as Bitcoin neared $80,000, with 396,000 traders losing positions, including a $36.7 million wipeout on Hyperliquid. The launch of 3x leveraged Bitcoin and Ethereum ETFs in Europe by Leverage Shares has added to concerns, as such products could exacerbate volatility during sharp price swings. According to data, Ethereum's open interest in futures contracts has dropped 7% week-on-week to $6.7 billion, signaling a reduction in speculative activity.

Macro factors continue to weigh on sentiment. The Federal Reserve's December rate-cut odds have plummeted to 46%, down from 93.7% in early October, dashing hopes for a relief rally. Institutional investors, tracked as "smart money" traders, have added $5.7 million in short positions in the past day, reflecting a growing bet on further declines. Geopolitical tensions, including escalating conflicts in Eastern Europe, have also fueled risk-off behavior, with $1.87 billion in liquidations recorded in late November amid missile attacks in the Russia-Ukraine war.

Despite the near-term turmoil, some analysts argue that Bitcoin's long-term fundamentals remain intact. The upcoming Ethereum Dencun upgrade in early 2026 and continued institutional adoption - evidenced by tokenized funds from UBS and BlackRock - could provide a foundation for recovery. However, with retail fear indicators hitting "extreme" levels and ETF outflows showing no sign of abating, the path to stabilization appears fraught.

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