Bitcoin approaches $80,000: On-chain data and options warn that the market may face a new round of downside risk

Bitcoin prices plummeted to $89,000 during Asian trading hours, briefly approaching the $80,000 level, dragging the total cryptocurrency market cap down from $3.22 trillion to $3.06 trillion, a $160 billion wipeout in a single day. As expected, the Federal Reserve cut interest rates by 25 basis points, but dissent within the FOMC and Chairman Powell’s hawkish stance became the main catalysts for this intense market correction.

Meeting minutes showed multiple officials opposed the rate cut, with Powell further revealing that the Fed might pause rate hikes until January 2026. This hawkish signal quickly dampened risk asset sentiment. Additionally, the Fed plans to purchase up to $40 billion of Treasury securities within 30 days; although officials emphasized it is not QE, the market widely perceives this as exposing liquidity pressures. Gold prices subsequently rose, with analysts warning that the banking system could face deeper risks.

The derivatives market also issued strong warnings. Over the past 24 hours, $520 million worth of crypto positions were liquidated, nearly $400 million of which were longs. Liquidation volumes for tokens like BTC, ETH, SOL, XRP, and DOGE increased significantly. Meanwhile, open interest in Bitcoin options surged, but the put/call ratio rose to 1.09, indicating traders are betting on further downside. The notional value of Bitcoin options expiring this Friday totals $3.56 billion, with the maximum pain point near $90,000.

On-chain data also leans bearish. The Bitcoin Bullish Score index dropped to zero after the rate cut, indicating extreme bearish sentiment; CryptoQuant also shows that the “bullish days” metric remains weak, with bullish forces clearly suppressed by bears. Analyses also point out that Bitcoin is still under profit-taking pressure, with whale and exchange inflows both on the rise.

On-chain analyst Ali Martinez stated that historically, the best buying points tend to occur when on-chain loss levels approach -37%, whereas currently it is only -18%, suggesting further downside may still be possible.

Considering market sentiment, options structure, on-chain indicators, and macro policy factors, the cryptocurrency market is likely to remain highly volatile in the short term, with risks of further declines to support levels.