Bitcoin Tumbles to $82K Amid Policy Jitters, Triggering $1.7B in Market Liquidations
A wave of risk aversion swept through global markets on Thursday, dragging Bitcoin to its lowest point since last spring. The flagship cryptocurrency fell sharply, erasing recent gains and triggering a cascade of liquidations across digital asset exchanges.
According to data from CoinGecko, Bitcoin's price slid 7.4% within 24 hours, bottoming out at $82,134 before finding tentative support. The broader sell-off wiped 6.7% from the total crypto market capitalization, with analytics platforms reporting a staggering $1.68 billion in liquidated long and short positions as volatility spiked.
Analysts point to mounting policy uncertainty in Washington as a primary catalyst. Market sentiment soured following news that former President Donald Trump would announce his nominee for Federal Reserve Chair on Friday. While unconfirmed, sources indicate former Fed Governor Kevin Warsh—a noted critic of expansive monetary policy—is a leading contender.
"The market is pricing in a more hawkish Fed under a potential Warsh leadership," said Lai Yuen, an investment analyst at Fisher8 Capital. "This shift in expectations for higher-for-longer interest rates is creating headwinds for risk assets, including crypto, in the near term."
Further pressure came from escalating geopolitical flashpoints. A new executive order targeting nations trading oil with Cuba, coupled with renewed concerns over potential U.S. involvement in the Middle East and ongoing conflicts in Ukraine and the South China Sea, prompted investors to flee to traditional safe havens.
Market structure data reveals the sell-off was driven by concerted action. "We observed a sharp rise in open interest followed by a steady decline in cumulative volume delta," noted an analyst from Velo Data. "This pattern confirms selling pressure was systemic, coming from both spot and derivatives markets simultaneously."
The options market is bracing for further downside. Sean Dawson, Head of Research at Derive, pointed to a deeply negative 30-day Bitcoin skew of -12% as evidence traders are actively hedging against more losses. "There's a palpable fear of a deeper correction toward the $70,000-$75,000 zone," Dawson stated, adding that while regulatory progress like the Clarity Act is positive, it's "unlikely to be a short-term price driver."
As of Friday morning, Bitcoin has clawed back some losses, trading around $82,850, up 1.1% over the past hour. Equities in Asia also edged higher, finding relief after Trump backed a Senate deal to avert a government shutdown, temporarily easing political friction.
Market Voices: Reactions to the Rout
Marcus Chen, Portfolio Manager at Horizon Digital Assets: "This is a healthy deleveraging. The market had become overly optimistic too fast. Fundamentals for adoption remain strong, but we needed this flush of excessive speculation."
Anya Petrova, Independent Crypto Trader: "It's absolute carnage out there. The leverage in this market is a ticking time bomb. These policy headlines are just excuses; the real story is the unsustainable bubble built on borrowed money. Regulators need to step in before more retail investors get wiped out."
David Riggs, Economist at FinTech Insights Group: "The reaction underscores crypto's continued sensitivity to traditional macro drivers—Fed policy and geopolitical risk. It's a reminder that the 'decoupling' narrative is premature. Bitcoin is behaving like a high-beta risk asset for now."
Sarah Lim, CTO of a Blockchain Gaming Startup: "The short-term noise is distracting. Our builder community is heads down. Price volatility is expected in this phase. We're focused on user acquisition and product development, which matter more in the long run."