Bitcoin plunged through critical support levels on October 8, touching an intraday low near $80,000 as a severe cryptocurrency selloff triggered over $1 billion in liquidations across the market. The largest cryptocurrency traded around $80,744 as of late trading, representing a 3% decline over 24 hours and roughly 4% over the past week, according to CryptoSlate. The overwhelming majority of liquidations hit traders positioned for higher prices, wiping out long positions in a cascading unwind of leveraged exposure.
The price collapse coincided with significant outflows from U.S. spot Bitcoin exchange-traded funds, which suffered their largest single-day withdrawals since late June. Data from SoSoValue cited by CryptoSlate shows the 12 listed U.S. Bitcoin ETFs lost $484.9 million on October 7, marking the steepest exodus since June 25. Ethereum ETFs experienced similar stress, with withdrawals reaching their highest level in nine months. BlackRock's iShares Bitcoin Trust, which had consistently attracted inflows through much of 2026, was among the products seeing substantial redemptions during the rout.
Compounding market jitters, U.S. government-linked wallets executed another major movement of seized Bitcoin on October 8, transferring over $1 billion worth of the cryptocurrency as prices slid. CryptoSlate reported that Galaxy Research flagged the transfer of 12,267 BTC, valued at approximately $1 billion, from a government-controlled address holding assets recovered from the Bitfinex hack. This transfer followed a $383 million deposit to Coinbase Prime that occurred a day earlier, fueling speculation about potential sales.
However, CoinDesk analysis of Arkham data indicated the 12,267 BTC moved to unlabeled wallets rather than an exchange, with no immediate indication of sale. Cointelegraph separately confirmed blockchain analysts identified the U.S. government wallet as tied to Bitfinex hack recovery funds, with the movement following earlier transfers totaling $770 million in seized assets. The pattern of large-scale government wallet activity has repeatedly preceded or accompanied price weakness throughout 2026, with market participants closely monitoring for any signals of eventual disposition.
Despite the acute selling pressure, broader institutional flows into digital assets have remained substantial this year. The Block reported JPMorgan analysts estimate approximately $50 billion has flowed into digital assets in 2026, equivalent to an annualized pace of $66 billion. The investment bank noted improving momentum heading into the fourth quarter, even as spot market prices deteriorated. This divergence between year-to-date inflows and recent price action suggests much of the institutional capital deployed earlier in the year may now be underwater or seeking exit liquidity, potentially exacerbating the current volatility.
The confluence of forced liquidations, ETF outflows, and government wallet movements has created a fragile market structure where technical support levels have failed to hold. The $81,000 buy wall that had provided some cushion was decisively breached, leaving traders to assess whether the psychological $80,000 level will prove more durable or give way to further downside discovery.