Bitcoin price approached the $85,000 support level earlier today amid increased liquidations ahead of the release of U.S. jobs data later today.

According to data from crypto.news, Bitcoin (BTC) fell sharply from over $89,000 yesterday to a low of $85,427 today, before recovering slightly to $85,798 at press time, down 4.2% on the day. At this price, it is down 9.3% from last Thursday’s high and nearly 32% below its year-to-date high.

Bitcoin price reacts to macro pressures

The bellwether asset’s price dipped sharply as investors remained cautious ahead of the U.S. jobs data set to be released at 8:30 AM ET today. The latest non-farm payroll data will provide insight into the strength of the labor market. 

Economists polled by Reuters expect the upcoming report to show the labor market was sluggish in October, with estimates that the economy added 55,000 jobs, almost half of the previous month.

While a slowdown in job creation typically means lower inflation risks and gives more room to the Fed to cut interest rates, investors likely continue to be cautious, especially since the Fed hinted at only one cut set for 2026 after slashing interest rates by 0.25% just a week earlier.

For context, cryptocurrencies, including Bitcoin, tend to rally when more Fed rate cuts are expected and drop when the central bank withholds or increases interest.

The broader uncertainty regarding the Fed’s decision has likely led to profit-taking among investors, which triggered massive liquidations as highly leveraged traders were forced to exit positions. Such moves often trigger a liquidation cascade as long positions fall one by one. 

Data from CoinGlass shows the broader crypto market experienced $653.4 million in liquidations, with $576.6 million coming from long positions. Out of this, Bitcoin alone accounted for $169 million in long liquidations.

Bitcoin’s price drop also comes as derivatives traders unwound their leveraged positions. Notably, the open interest in its futures market has dropped by 2% to $59.8 billion in the past 24 hours, much lower than the $94.1 billion recorded in early October.

Investors also appear to be reacting to the drop in demand from institutional investors. Data from SoSoValue shows that U.S. spot Bitcoin ETFs have so far logged $158.8 million in net outflows in December, continuing the trend seen in the prior month when they shed nearly $3.5 billion.

Amidst the uncertainty, some market commentators suggest that the broader crypto market downturn, including Bitcoin, could be a coordinated dump to manipulate prices, which could push prices lower. 

Per an X post from well-followed market expert Tracer, large players such as Binance, Coinbase, Wintermute, and whales have together sold nearly $2 billion worth of BTC yesterday, kickstarting the drop.

Analysts remain divided

“In the short term, Bitcoin could fall as low as $75,000. Though, it appears to consistently be moving in on $135,000 despite pullbacks. As in broader markets, the sentiment in crypto is fearful. This is reflected in the prices,” Komodo Platform CTO Kadan Stadelmann told crypto.news.

At press time, the Crypto Fear and Greed Index showed a reading of 11, indicating persistent “Extreme Fear” in the market, which could likely continue to lead to volatility at least until a clearer direction appears.

Despite this, others, such as analyst Ted Pillows, believe that Bitcoin price could likely hold on to the $85,000 level as support owing to “large buy orders between $80,000 and $85,000 on Binance.”