Bitcoin falls to $81,000, entering “fire sale” zone on Rainbow Chart

Bitcoin slid to roughly $81,000 on Friday, a 10% drop from the 48‑hour high above $90,000, pushing the price into the Rainbow Chart’s “fire sale” band that signals deep undervaluation [1]. The move follows the Federal Reserve’s recent policy meeting and has triggered nearly $960 million in forced liquidations for BTC alone, underscoring heightened market stress.

Market pressure and on‑chain fallout

The decline came after Fed Chair Jerome Powell highlighted a resilient labor market without hinting at imminent rate cuts, a narrative that turned speculative assets bearish [1]. Leveraged traders were hit hard: a multibillion‑dollar cascade erased positions, with Bitcoin accounting for close to $960 million of forced exits in a single session [1]. The broader crypto market also saw $1.6 billion liquidated from long positions, while equity turmoil—most notably a $357 billion plunge in Microsoft’s market value—added to risk‑off sentiment [1].

Position relative to historic valuation bands

The Rainbow Chart, a logarithmic regression model that has tracked Bitcoin since 2012, places today’s price in the “fire sale” band—historically the lowest colored zone and a signal of deep undervaluation [1]. BTC has slipped below its two‑month safety net, the 100‑week moving average near $85,000, and now eyes $75,000 as the next technical support [1]. A further breach toward the 200‑week average around $58,000 would open the path to additional downside [1].

Upcoming macro and regulatory cues

Beyond price action, the market will watch next week’s White House meeting with banking and crypto executives, where stalled U.S. crypto legislation may be discussed [1]. Such policy dialogue could influence sentiment, but the immediate price outlook remains tied to technical thresholds and the lingering impact of the Fed’s stance.

What to watch

• $75,000 – next major support level on the chart.
• $58,000 – 200‑week moving average, a deeper downside trigger.
• White House crypto‑legislation meeting – potential regulatory catalyst.

Bitcoin’s plunge into the Rainbow Chart’s fire‑sale zone highlights a rare convergence of macro‑policy surprise, leveraged liquidation pressure, and technical breach, leaving the market to decide whether the price floor will hold or slide further toward historic lows.