Bitcoin briefly fell below the $80,000 level on Friday, extending a broader cryptocurrency market selloff driven by profit-taking, leveraged long liquidations and rising geopolitical uncertainty tied to U.S.-Iran tensions. The world’s largest cryptocurrency traded as low as $79,694 before partially recovering toward the $80,900 range during late trading hours.
The drop triggered heavy liquidations across crypto derivatives markets. According to market data cited in multiple reports, more than $331 million in bullish crypto positions were liquidated over the past 24 hours, including nearly $100 million within a two-hour window as Bitcoin broke below key technical support levels.
Ethereum also declined sharply, briefly falling below $2,300, while other major digital assets including Solana, XRP and Dogecoin posted losses as broader market sentiment weakened. Analysts said the selloff was amplified by traders taking profits after Bitcoin’s recent rebound from roughly $63,000 in April to above $82,000 earlier this week.
Despite the decline, institutional demand through spot Bitcoin exchange-traded funds remained resilient. U.S. spot Bitcoin ETFs recorded inflows of approximately $629 million on May 1, $532 million on May 4 and $467 million on May 5, according to flow data referenced in market reports. Analysts said the continued ETF buying suggests long-term institutional positioning remains constructive even as short-term volatility intensifies.
Market participants attributed part of the decline to geopolitical tensions involving Iran and the United States, which increased investor caution across risk assets. However, analysts noted the crypto selloff was largely driven by internal market dynamics rather than broader macroeconomic weakness, as U.S. equity indexes remained near record highs during the session.
Profit-Taking Accelerates After Sharp Recovery Rally
Onchain data showed short-term Bitcoin holders increasingly locking in gains after the cryptocurrency’s rapid recovery over recent weeks. According to analytics cited in market reports, Bitcoin’s Short-Term Holder SOPR metric rose above 1.0, indicating traders were selling coins at a profit for the first time in several months.
Analysts said the market entered a zone where many traders viewed the rally as an opportunity to reduce exposure after significant unrealized gains accumulated since April’s lows. Realized profits among short-term holders reportedly reached their highest level since December 2025 earlier this week.
The selloff intensified as leveraged bullish positions were rapidly unwound. Funding rates across derivatives exchanges moved back toward neutral territory as long positions were liquidated and open interest declined. Analysts noted that while liquidation-driven declines can accelerate short-term price swings, they also help remove excessive leverage from the market.
Several market observers pointed to the $80,000-$82,000 range as a key technical support zone. Bitcoin had recently reclaimed that area after trading below it for several months, making the region an important test for whether the recent rally can sustain momentum.
ETF Inflows Continue Supporting Institutional Sentiment
Despite rising volatility, institutional participation in Bitcoin markets remains elevated. Analysts said spot ETF inflows continue acting as one of the primary structural supports for the cryptocurrency market, particularly as large asset managers maintain steady allocations into regulated Bitcoin investment products.
BlackRock’s iShares Bitcoin Trust and Fidelity’s FBTC have continued attracting significant inflows in recent sessions, reinforcing institutional demand even during periods of heightened volatility. Analysts noted that ETF flows increasingly influence short-term price action and liquidity conditions across crypto markets.
Market strategists said Bitcoin’s next directional move will likely depend on whether the asset can stabilize above the low-$80,000 range while maintaining continued spot demand from ETFs and institutional investors. A sustained recovery above $85,000 could revive bullish momentum, while a deeper breakdown below support levels may expose the market to additional downside pressure toward the mid-$70,000 range.