Bitcoin Price Tests $85,000 Support Level as Liquidations Rise Before US Jobs Report

Earlier today, Bitcoin’s price neared the $85,000 support level due to heightened liquidations in anticipation of U.S. jobs data being released later today.

As reported by crypto.news, Bitcoin (BTC) plummeted from over $89,000 yesterday to a low of $85,427 today, before slightly rebounding to $85,798 at press time, marking a daily decline of 4.2%. At this level, it is down 9.3% from the peak last Thursday and nearly 32% lower than its year-to-date high.

The drop in the leading asset’s price occurred as investors remained cautious ahead of the U.S. jobs data expected to be released at 8:30 AM ET today. The upcoming non-farm payroll data will shed light on labor market dynamics.

Economists surveyed by Reuters anticipate that the upcoming report will reveal sluggish labor market conditions in October, with estimates suggesting the economy added only 55,000 jobs—almost half the number from the previous month.

While a slowdown in job creation usually translates to lower inflation risks, allowing the Fed more flexibility to reduce interest rates, investors remain apprehensive, particularly given the Fed’s indication of only one rate cut anticipated in 2026, following a 0.25% reduction just a week ago.

It’s worth noting that cryptocurrencies, including Bitcoin, typically rally when expectations for Fed rate cuts rise and decline when the central bank tightens or holds rates steady.

The general uncertainty surrounding the Fed’s forthcoming decisions may have prompted profit-taking among investors, causing significant liquidations as highly leveraged traders exited their positions, often triggering a cascade of further liquidations as long positions are unwound.

Data from CoinGlass indicates that the broader crypto market witnessed $653.4 million in liquidations, with $576.6 million attributed to long positions. Of this total, Bitcoin represents $169 million in long liquidations.

This drop in Bitcoin’s price coincides with derivatives traders liquidating their leveraged positions. The futures market open interest has decreased by 2% to $59.8 billion over the past 24 hours, a significant drop from the $94.1 billion recorded in early October.

Investors also seem to be responding to a declining demand from institutional investors. Data from SoSoValue reveals that U.S. spot Bitcoin ETFs experienced net outflows of $158.8 million in December, continuing a trend from the previous month, which saw nearly $3.5 billion in outflows.

Amid this uncertainty, some market analysts suspect that the wider downturn in the crypto market, including Bitcoin, could be a coordinated effort to manipulate prices, pushing values downward.

As noted in an X post by renowned market expert Tracer, large entities such as Binance, Coinbase, Wintermute, and whales collectively sold nearly $2 billion worth of BTC yesterday, initiating the decline.

Analysts remain divided

“In the near term, Bitcoin could dip as low as $75,000. However, it seems to be consistently trending towards $135,000 despite occasional pullbacks. The sentiment in crypto mirrors that in broader markets—fearful, which is evident in current prices,” stated Kadan Stadelmann, CTO of Komodo Platform, to crypto.news.

At present, the Crypto Fear and Greed Index indicates a reading of 11, reflecting ongoing “Extreme Fear” in the market, which is likely to contribute to volatility until a clearer market direction emerges.

Conversely, other analysts, like Ted Pillows, believe that Bitcoin could maintain the $85,000 level as support due to “substantial buy orders placed between $80,000 and $85,000 on Binance.”