Bitcoin fell below $78,000 on Saturday, extending price weakness into the weekend as traders remained on the defensive amid geopolitical headlines, political uncertainty in the United States and continued unease in crypto markets.
The world’s largest cryptocurrency has fallen more than 7% in the past 24 hours, trading around $77,000, according to CoinDesk data. Trading volumes thinned over the weekend, a situation that often makes prices more vulnerable to sharp movements.
Risk sentiment was shaken by reports of an explosion at Iran’s port of Bandar Abbas, a key maritime hub in the Strait of Hormuz that handles about a fifth of the world’s seaborne oil.
Further fueling tensions in the region, Trump reposted an article on Truth Social claiming that the Islamic Revolutionary Guard Corps (IRGC), a military branch of Iran’s armed forces, is in “full panic mode.” The message is accompanied by a video showing chaos in the streets of Tehran.
The incident added to already high tensions between Tehran and Washington, discouraging investors from riskier assets.
“It looks like a widespread sell-off. We have a risk of an event this weekend with a fleet of combat aircraft carriers off the coast of Iran. Trump is making noise, which doesn’t help,” Russell Thompson, chief investment officer of the Hilbert Group, told CoinDesk.
“This is not specific to BTC, but BTC is obviously a high delta product, so the movement has been much higher and more volatile in BTC,” Thompson added.
“Mechanical failure”
Elsewhere, Chris Soriano, co-founder and CCO of BridgePort, attributed the rapid decline to weak order books.
“The current decline is a classic case of forced deleveraging linked to ‘phantom liquidity’,” he said.
“On the surface, the market looks healthy as spreads are incredibly tight (~0.0011bps on major BTC/USDT sites).
“When a wave of forced selling hits such a shallow portfolio, bids instantly evaporate and price spreads narrow rather than drift. This is not a fundamental revaluation; it is a mechanical failure of liquidity to absorb the flows,” Soriano added.
Political uncertainty in the United States also weighed on markets. A brief federal government shutdown began this weekend after Congress failed to pass a full-year funding bill before a midnight deadline. Although expected to be short-lived, the disruption added to a growing list of macroeconomic concerns that have made traders cautious.
$75,000 to watch?
Crypto-specific factors added to the selling pressure.
Bitcoin struggled to attract sustained buying interest after a volatile January, with flows into spot Bitcoin ETFs turning negative this week and derivatives markets continuing to unwind leverage built up late last year. The backdrop left price action unstable and prone to massive sell-offs during the quietest trading hours.
Recent public squabbles between prominent industry figures over the causes of October’s historic selloff have also kept nerves frayed, reinforcing the sense that confidence has not yet fully returned.
So where can liquidation find the next wave of buyers? As CoinDesk’s Omkar Godbole pointed out earlier in the week, in April of last year, buyers appeared at around $75,000, stalling the sell-off at the time, making it a key level to watch now.
Below that, the next support lies at the 200-week average at $58,000.
For now, bitcoin remains range-bound as traders monitor whether the weekend sell-off sparks new demand or gives way to a deeper decline.
UPDATE (January 31, 6:04 p.m. UTC): Updates price action
UPDATE (January 31, 5:38 p.m. UTC): Updates throughout, including recent price drop and commentary on reasons for sale.
