Bitcoin fell below $78,000 on Saturday, extending price weakness into the weekend as traders remained defensive amid geopolitical headlines, political uncertainty in the US and continued turmoil across crypto markets.
The world’s largest cryptocurrency fell more than 7% over the past 24 hours, trading around $77,000 per share. CoinDesk data. Trading volume fell into the weekend, a setup that often leaves prices more vulnerable to sudden movements.
Risk sentiment was hit after reports of an explosion at Iran’s Bandar Abbas port, a key shipping hub on the Strait of Hormuz that handles about a fifth of the world’s seaborne oil.
Further reviving tensions in the region, Trump has now republished on Truth Social a post saying that the Islamic Revolutionary Guard Corps (IRGC), a military branch of the Iranian armed forces, is in “full panic mode”. The post is accompanied by a video showing chaos in the streets of Tehran.
The incident added to already heightened tensions between Tehran and Washington and pushed investors away from riskier assets.
“This looks like a broad-based selloff. We have event risk over the weekend with an aircraft carrier fleet sitting out of Iran. Trump is saber-rattling, which is not helping,” Russell Thompson, Chief Investment Officer at Hilbert Group told CoinDesk.
“This is not BTC specific, but BTC is obviously a high delta product, so the move 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 declines to thin order books.
“The current decline is a classic case of ‘Phantom Liquidity’ meeting forced deleveraging,” he said.
“On the surface, the market looks healthy because spreads are incredibly tight (~0.0011 bps in major BTC/USDT venues). But that tightness masks a lack of real depth. We see top-of-book liquidity of only ~$500,000 in key venues. In plain English: “the open (thin’thins spreads behind it) depth).”
“When a wave of foreclosures hits a book that shallow, bids immediately disappear and price differentials collapse rather than slide. This is not fundamental repricing; it is a mechanical failure of liquidity to absorb flow,” Soriano added.
Political uncertainty in the US also weighed on the markets. A brief shutdown of the federal government began over the weekend after Congress failed to pass a full-year funding bill by a midnight deadline. Although expected to be short-lived, the lapse added to a growing list of macro issues that have kept traders cautious.
$75,000 to see?
Crypto-specific factors exacerbated the selling pressure.
Bitcoin has struggled to attract sustained buying interest after a volatile January, with flows into spot bitcoin ETFs turning negative this week and derivatives markets still unwinding leverage built up late last year. The backdrop has left price action choppy and prone to selling during quieter trading hours.
Recent public sparring among prominent industry figures over the reasons for October’s historic liquidation event has also kept nerves frayed, reinforcing a sense that confidence is not yet fully restored.
So where can the sale find the next wave of buyers? As CoinDesk’s Omkar Godbole pointed out earlier this week, in April of last year, buyers appeared at around $75,000, which stopped the selling at that point, making it a key level to watch now.
Below that is the next support at the 200-week average, which is at $58,000.
For now, bitcoin remains capped, with traders watching to see if the weekend’s sell-off draws new demand or gives way to deeper downside.
UPDATE (Jan 31 at 18:04 UTC): Update price action
UPDATE (January 31 at 17:38 UTC): Updates throughout, including the latest price drop and commentary on the reasons for the sale.
