Bitcoin slides as macro risks converge

Bitcoin fell more than 6% to the low $83,000 range as rising US-Iran tensions, mounting fears of a US government shutdown and broader risk-off sentiment hit an already fragile crypto market.

The sell-off came amid renewed geopolitical stress after Washington warned Tehran of potential escalation, a backdrop that typically prompts investors to cut exposure to volatile assets rather than seek alternative hedges.

At the same time, expectations of a US government shutdown have tightened financial conditions, with previous shutdown episodes coinciding with double-digit Bitcoin declines as traders reduce risk first and reassess later.

A severe winter storm across parts of the US and Canada has added to the defensive mood, compounding geopolitical and fiscal stress even if it has not directly disrupted Bitcoin’s network or mining activity.

Structurally, the market has weakened as US spot Bitcoin ETF flows have turned negative, with net sales this year replacing the strong inflows that supported prices during the previous cycle.

On-chain data also show retail demand contracting, removing a key stabilising force and leaving prices more sensitive to leverage, liquidations and forced selling.

With supply-in-loss still relatively low by historical standards, the data suggest Bitcoin has not fully reset, leaving it vulnerable to further volatility unless underlying demand improves.

At the time of reporting, Bitcoin price was $81,285.11.