What next as BTC plunges under $78,000

Bitcoin fell below $78,000 on Saturday, extending price weakness into the weekend as traders stayed defensive amid geopolitical headlines, political uncertainty in the U.S. and lingering unease across crypto markets.

The world’s largest cryptocurrency fell more than 7% over the past 24 hours, trading around $77,000, per CoinDesk data. Trading volumes thinned into the weekend, a setup that often leaves prices more vulnerable to abrupt moves.

Risk sentiment took a hit after reports of an explosion at Iran’s Bandar Abbas port, a key shipping hub on the Strait of Hormuz that handles roughly a fifth of the world’s seaborne oil.

Further reigniting tensions in the region, Trump has now republished on Truth Social a post saying that the Islamic Revolutionary Guard Corps (IRGC), a military branch of the Iranian Armed Forces, is in “full panic mode.” The post is accompanied by a video showing chaos in the streets of Tehran.

The incident added to already elevated tensions between Tehran and Washington, nudging investors away from riskier assets.

“This looks like a broad-based sell-off. We have an event risk over the weekend with an aircraft carrier battle fleet sitting off of Iran. Trump is sabre rattling, which isn’t helping,” Russell Thompson, Chief Investment Officer at Hilbert Group told CoinDesk.

“This isn’t BTC specific, but BTC is obviously a high delta product, so the move has been much higher and more volatile in BTC,” Thompson added.

‘Mechanical failure’

Elsewhere, Chris Soriano, co-founder & CCO of BridgePort, attributed the swift declines to thin orderbooks.

“The current drop is a classic case of ‘Phantom Liquidity’ meeting forced deleveraging,” he said.

“On the surface, the market looks healthy because spreads are incredibly tight (~0.0011 bps on major BTC/USDT venues). But that tightness is masking a lack of real depth. We are seeing top-of-book liquidity sitting at just ~$500k on key venues. In plain English: The ‘door’ looks wide open (tight spreads), but there is no floor behind it (thin depth).”

“When a wave of forced selling hits a book that shallow, the bids evaporate instantly, and price gaps down rather than drifting down. This isn’t a fundamental repricing; it’s a mechanical failure of liquidity to absorb flow,” Soriano added.

Political uncertainty in the U.S. also weighed on markets. A brief federal government shutdown began over the weekend after Congress failed to pass a full-year funding bill ahead of a midnight deadline. While expected to be short-lived, the lapse added to a growing list of macro concerns that have kept traders cautious.

$75,000 to watch?

Crypto-specific factors compounded the selling pressure.

Bitcoin has struggled to attract sustained buying interest after a volatile January, with flows into spot bitcoin ETFs turning negative this week and derivatives markets still unwinding leverage built up late last year. The backdrop has left price action choppy and prone to selloffs during quieter trading hours.

Recent public sparring among prominent industry figures over the causes of October’s historic liquidation event has also kept nerves frayed, reinforcing a sense that confidence has yet to fully return.

So where can the sell-off find the next wave of buyers? As CoinDesk’s Omkar Godbole pointed out earlier in the week, in April last year, buyers emerged at around $75,000, stalling the selloff at the time, making it a key level to watch now.

Below that, the next support is at the 200-week average, which is at $58,000.

For now, bitcoin remains rangebound, with traders watching whether the weekend selloff draws fresh demand or gives way to deeper downside.

UPDATE (Jan. 31, 6:04 PM UTC): Updates price action

UPDATE (Jan. 31, 5:38 pm UTC): Updates throughout, including the recent price decline and comments on the reasons for the selloff.