Bitcoin Slides Below $85,000 as Risk-Off Sentiment Triggers Sell-Off

Bitcoin slid to its lowest level in more than two months on Thursday, briefly retesting the $84,000 support zone. The decline followed a broader shift toward risk aversion across global markets after Microsoft shares fell sharply, driven by concerns over higher capital expenditures and weaker quarterly cloud server revenue results.

Despite the recent market volatility, Bitcoin’s fundamental outlook remains positive, as market analysts monitoring structural valuation models continue to point out. Market analysts are increasingly urging market participants to take a step back and focus on long-term metrics rather than short-term price actions, as analysis indicates a steadily improving price floor for Bitcoin in the coming years.

Bullish Margin Demand Reaches Two-Year High

In a recent post by analyst Pius the Banker, an updated Bitcoin power law model based on 52-week lows identified a crucial support area around $60,000. Based on the historical correlation, the model suggests that Bitcoin will likely stay above the $100,000 level until at least the second half of 2027.

Meanwhile, derivative data indicate that market participants are struggling with high leverage risks. The demand for bullish margin positions reached a two-year high despite a 26% Bitcoin price drop in ninety days. This increase sparked concerns about liquidation risks, especially after about $360 million worth of BTC futures positions were liquidated Thursday in volatile market conditions.

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Bitcoin Futures Premiums Reflect Market Caution

Margin longs on Bitfinex reached $83,933 BTC, the highest level since November 2023. Although the notional value of this exposure is about $7.3 billion, the cost of borrowing is still very low since the value of the collateral exceeds the value of the loans. This has made margin longs more attractive to traders compared to futures contracts, which are less efficient due to high costs.

The Bitcoin futures market paints a different picture. The monthly contracts usually trade at annualized premiums of five to ten percent above spot prices. During bullish periods, this indicator often exceeds the neutral level, which last happened in early February 2025, when Bitcoin was trading at around $103,500, during the peak speculative momentum periods in the past.

Macroeconomic uncertainty also contributed to the market uncertainty, driven by renewed doubts about the value of artificial intelligence. The price drop of Bitcoin was accompanied by strong intraday movements in gold markets, indicating risk hedging. Despite the increase in margin longs, the on-chain data and derivative market indicators continue to reflect caution rather than a bullish trend at this point.

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