Bitcoin has officially entered a technical bear market after a brutal weekend selloff saw the world's largest cryptocurrency plunge below the psychological $80,000 support level for the first time since April 2025. The crash, which bottomed out near $74,876 during early Asian trading on Monday, triggered a massive $2.56 billion liquidation event, wiping out leveraged traders and testing institutional conviction. With Bitcoin currently trading around $77,500, the market is grappling with a "perfect storm" of macroeconomic headwinds, including a disappointing Microsoft earnings report and hawkish signals from the Federal Reserve.

$2.5 Billion Wiped Out in Weekend Liquidation Cascade

The weekend's price action was characterized by a violent "long squeeze" that caught bullish traders off guard. According to data from Coinglass, more than $2.56 billion in leveraged positions were liquidated within a 24-hour window on Saturday alone, marking the tenth-largest single-day liquidation event in crypto history. Over $2 billion of these were long positions, forcibly closed as Bitcoin sliced through key support levels at $82,000 and $80,000.

This mechanical unraveling was exacerbated by thin weekend liquidity. "The speed of the drop from $85,000 to $75,000 indicates a complete capitulation of the leverage that had built up since the start of 2026," noted Dessislava Ianeva, a market analyst at Nexo. The cascade effect forced prices significantly lower than fundamental valuations, leaving the market in a state of "extreme fear" with the Crypto Fear & Greed Index hitting 14—its lowest point since the crypto winter of 2022.

MicroStrategy Underwater: The $76,052 Cost Basis Threat

Perhaps the most alarming development for institutional investors is the pressure on MicroStrategy (MSTR), the largest corporate holder of Bitcoin. With the price briefly dipping to $74,876, MicroStrategy's massive treasury of 713,502 BTC temporarily fell below its average cost basis of $76,052. This rare inversion placed the company's holdings in an unrealized loss position of nearly $1 billion, triggering a sharp 10% selloff in MSTR stock, which plummeted to around $140.

Despite the paper losses, MicroStrategy remains aggressive. Filings revealed the company purchased an additional 855 BTC last week at an average price of $87,974, funded by stock sales. However, the psychological impact of the "underwater" status has rattled market confidence. Analysts warn that if Bitcoin fails to reclaim the $80,000 level decisively, the fear of a "forced capitulation" or a margin call on MicroStrategy-backed loans could suppress any immediate recovery, although the company has repeatedly stated its capital structure is robust enough to withstand such volatility.

Spot Bitcoin ETF Outflows Hit Record Levels

Institutional sentiment has soured alongside the price action. Spot Bitcoin ETFs recorded a staggering $1.7 billion in net outflows last week, signaling a retreat by traditional finance investors. This marks the largest weekly outflow since the ETFs launched, driven largely by broader risk-off sentiment in global markets.

The catalyst appears to be a convergence of macro factors. A shock 10% drop in Microsoft stock following missed earnings, combined with the nomination of hawk Kevin Warsh as the next Federal Reserve Chair, has strengthened the U.S. dollar and punished risk assets. "Bitcoin is currently trading like a high-beta tech stock," explained John Todaro of Needham. "When the Nasdaq sneezes, crypto catches a cold. Right now, the correlation is punishing."

BTC Bear Market Analysis: Key Support Levels to Watch

Technically, Bitcoin is now in a bear market, having corrected roughly 40% from its October 2025 peak of nearly $126,000. The breakdown below $80,000 has turned a former major support zone into formidable resistance. Analysts are now eyeing the $70,000 to $72,000 range as the next critical line of defense.

If bulls cannot reclaim $80,000 by the weekly close, momentum indicators suggest further downside is likely. However, some contrarian indicators point to a potential bounce. The sheer magnitude of the liquidations suggests the market may be oversold in the short term, and the "funding rates" on derivatives platforms have turned negative, often a precursor to a relief rally. For now, all eyes remain on the $76,000 level—MicroStrategy's break-even point—as the line in the sand for the current cycle.