The Bitcoin Breakdown: Critical Levels to WatchBITMEX:BTCUSDT.P has suffered a 15% contraction week-over-week. We have pierced critical levels, including Michael Saylor’s MSTR Bitcoin cost basis.
While headlines focus on the immediate triggers such as Kevin Warsh’s nomination as Federal Reserve Chair, the structural rot that caused this crash began months ago.
If you are looking at the charts wondering why the floor fell out or where the new supports are, here is the breakdown of the hidden ‘10 Oct Pivot’ and the three specific price levels that now define the market structure.
The Fundamental Drivers Behind the Bitcoin Drop:
The sell-off wasn't just a reaction to news, but rather a collapse of a market structure that has been fragile for months.
1. The 10 Oct Pivot’: Liquidation Cascade & Market Maker Wipeout
To understand why Bitcoin capitulated to $74,500 this weekend, you must look back to 10 October 2025. This date marks the moment the correlation between risk assets broke. Gold went parabolic while Bitcoin began a slow, confused bleed. Crucially, this period triggered a massive liquidation cascade that bankrupted many key market makers. As these liquidity providers were wiped out, order book depth evaporated. This left Bitcoin structurally weak, hollow, and propped up only by fragile ETF inflows and leverage. When the macro environment shifted this week, the buffer usually provided by market makers did not exist to absorb the selling.
2. The Kevin Warsh Nomination
On 30 January, President Trump nominated Kevin Warsh as Federal Reserve Chair. Warsh represents a hawkish regime shift focused on balance sheet reduction. This signaled to the market that the Federal Reserve would no longer support the ‘debasement trade’ that had propelled asset prices higher, causing an immediate repricing of risk.
3. The Liquidity Fear From Government Shutdown
The final blow was the US government shutdown. With government operations halted, the market was gripped by a fear that the flow of new liquidity into the economy would completely stop.
Combined with Warsh’s nomination, the government shutdown created a worst-case scenario: a government that cannot spend and a central bank that refuses to print. This ‘fear of no new liquidity’ caused capital to freeze. Investors fled to cash. Without new money entering the system to support prices, the hollowed-out crypto market collapsed.
The 3 Critical Levels for BTC
Now that the leverage has been flushed (with over $2.5 billion in liquidations in a single weekend), we are left with a scarred chart. If you look at the price action specifically, the market is currently trapped between three distinct psychological zones.
The Saylor Line (Current Support: ~$76,000) The first and most immediate battleground is roughly $76,031. This is the estimated average cost basis of MicroStrategy’s massive Bitcoin treasury.For the first time in this cycle, Michael Saylor’s position is teetering on the edge of being underwater. The market knows this. The weekend wick down to $74,500 was a ‘stop hunt’—predatory traders trying to push the price low enough to trigger panic. But the line held.
As long as Bitcoin trades above this level, the corporate balance sheet narrative remains intact. If we lose this level for a sustained period, the psychological damage to retail investors—who view Saylor as the invincible bull—could be severe.
The Spot ETF Wall (Resistance: ~$84,000) If the Saylor Line is the floor, the ‘ETF Wall’ is the ceiling. The $84,000 to $85,000 range represents the cost basis for the billions of dollars that flowed into the US Spot ETFs over the last quarter.
These investors are not crypto natives. They are asset allocators and retirees. Right now, they are sitting on a loss. Human psychology dictates that when the price rallies back to their entry price, they will sell to ‘get out at breakeven’. This creates a massive wall of supply overhead. Until Bitcoin can decisively reclaim $84,000 and turn those holders back into profit, any rally is likely to be sold into.
2021 All-Time High at $69,000 If the contagion from the metals market continues and the Saylor Line breaks, there is only one level that matters: $69,000. This is the 2021 All-Time High. It is the structural ‘line in the sand’ for the entire multi-year bull market. A retest of this level would be painful. However, historically, retesting a previous cycle high is a generational buying opportunity.
What to Look Out For Next
As of today, the government shutdown has been resolved. However, Bitcoin remains in a precarious position. While traditional ‘safe havens’ are bouncing, crypto is lagging. Here’s what you need to watch:
The ‘Lag’ Signal (Gold vs. Bitcoin) : While Gold and Silver have rallied back strongly following the shutdown resolution, Bitcoin is still stuck in the mud, hovering near $78,000. This divergence is the most critical signal to watch. If metals continue to soar while Bitcoin stagnates, it confirms that the ‘liquidity vacuum’ in crypto is specific to the asset class (market maker failure) rather than just general macro fear. Bitcoin must catch up to the metals rally within the next 48 hours to confirm a bottom.
ETF Outflows vs. Stabilisation With the shutdown fear resolved , do ETF investors buy the dip or sell into the relief? Watch the daily flow data. If we see sustained outflows despite the government reopening, it suggests institutional confidence has been shaken by the Warsh nomination regardless of fiscal spending.
The $76k ‘Double Tap’ The market often tests a low twice . Expect a potential retest of the MicroStrategy cost basis ($76,052). If this level holds on a second test while Gold remains strong, it is a high-conviction buy signal. If it fails, the path to $69,000 opens up immediately.
