Bitcoin's price tumbled below $77,000 on Friday, extending a sharp decline as market participants reacted to a suspected security breach at Binance, the world's largest cryptocurrency exchange. The sell-off forced nearly $1.5 billion in leveraged positions to close, with bullish traders bearing the brunt of the damage.
The leading digital asset was trading near $76,664 late Thursday, down roughly 4.5% over the past 24 hours, after failing to hold the $80,000 level for a third consecutive session. The drop accelerated following Binance's disclosure that it was investigating a potential security incident, prompting industry partners to freeze billions of dollars in associated assets. Binance assured customers that their funds were safe, but uncertainty spread quickly across the market.
Massive liquidation wave hits crypto derivatives
Data from CoinGlass showed that cryptocurrency derivatives liquidations reached $1.49 billion within a 24-hour period, with $1.29 billion of that coming from long positions. More than 243,000 traders were affected, and Bitcoin accounted for approximately $475 million of the total, with bullish positions representing nearly 88% of that figure. These numbers reflect forced closures of leveraged trades, not losses in Bitcoin's overall market value.
When prices fall sharply, exchanges automatically close positions that no longer have sufficient collateral, and those forced sales can push prices lower, triggering further liquidations. This cascading effect was evident as Bitcoin broke through key support levels.
“Market recovery hinges on Binance restoring confidence in exchange security and customer funds,” said Dominick John, an analyst at Zeus Research, in a comment to The Block. The full scope of the breach remains unclear, but the immediate impact on market positioning was severe, catching traders who had anticipated a rebound above $80,000 on the wrong side of the move.
Technical levels to watch after the breakdown
The break below $77,000 has brought a critical technical marker into focus. Julio Moreno, head of research at CryptoQuant, identified Bitcoin's 365-day moving average near $77,406 as an initial support area. Bitcoin subsequently slipped beneath that level, putting pressure on buyers to defend the broader $76,300 to $77,000 range. Holding that zone could help stabilize prices after the liquidation wave, but a sustained loss would increase attention on $75,000.
Below that, analyst Ali Martinez is monitoring the 200-day moving average near $73,000 as a deeper potential support level. “Those are levels where I’ll look for support; not guaranteed bottoms,” Martinez cautioned. Moving averages can attract buyers, but they do not prevent prices from falling, especially when forced selling overwhelms normal trading activity.
On the upside, reclaiming $80,000 would be an initial sign that sellers are losing control. A sustained recovery toward $82,000 would offer stronger evidence of renewed demand. Until then, the swift reversal from above $80,000 leaves Bitcoin vulnerable to another test of lower prices.
Macro headwinds add to crypto's pressure
The Binance scare struck as investors were already reassessing riskier assets. The Federal Reserve held interest rates at 3.75% to 4% on Wednesday, leaving the door open for further tightening. September's US personal consumption expenditures inflation rose to 3.6% annually, up from 3.4% in August, reinforcing concerns that borrowing costs may remain elevated. Higher yields can strengthen the dollar and reduce the appeal of speculative assets like Bitcoin.
“Bitcoin’s near-term performance may depend more heavily on Treasury yields, dollar movements and broader risk sentiment,” said Lewis Huang, an analyst at Bitget, in comments made before the Binance incident. There is a counterpoint: US spot Bitcoin exchange-traded funds attracted $137 million on Wednesday, extending a three-day inflow streak to about $424 million. However, those figures predate the latest plunge and do not confirm that investors continued buying during Friday's sell-off.
This article is for informational purposes only and does not constitute financial advice.
