Bitcoin slipped around 2% on Monday as thin trading conditions during the US Labor Day holiday erased much of the weekend’s gains.
The pullback pushed Bitcoin (BTC) back below the key $80,000 level after bulls briefly regained control over the weekend.
Bitcoin Falls Below $80,000
Bitcoin moved lower during Monday’s session, falling nearly 2% as liquidity remained limited across the market.
The decline came shortly after BTC recorded its strongest weekly close since early May. However, buyers were unable to maintain momentum above $80,000.
Traders now appear cautious ahead of several important US economic releases later this week.
Key Points
- Bitcoin dropped around 2% and fell back below $80,000.
- BTC recently recorded its highest weekly close since early May.
- Traders are waiting for upcoming US inflation data before taking larger positions.
- Bitcoin has remained within a relatively narrow trading range since mid-August.
- Analysts continue to highlight Bitcoin’s ability to withstand recent macroeconomic pressure.
US Inflation Data Could Drive Bitcoin Volatility
TradingView data showed BTC/USD falling close to 2% during the session.
The move followed Bitcoin’s first weekly close above $80,000 since early May.
BTC/USD one-hour chart. Source: Cointelegraph/TradingView
With US financial markets closed for Labor Day, trading activity was lighter than usual. As a result, thinner order books increased the risk of sharp price movements in either direction.
Such conditions can make it easier for the market to move toward areas with large concentrations of liquidity.
CoinGlass data showed that liquidations were relatively balanced between long and short positions during the previous 24 hours.
Total cryptocurrency liquidations reached approximately $178 million.
Crypto liquidation history. Source: CoinGlass
Bitcoin Liquidity Builds Around Key Levels
Market liquidity increased as Monday progressed.
According to market data, notable liquidity clusters developed near $80,500 and $78,800. These areas could become important short-term price targets if volatility increases.
Crypto liquidation heatmap. Source: CoinGlass
Trading firm QCP Capital also pointed to declining volatility across the cryptocurrency market.
The company suggested that traders are waiting for a stronger external catalyst before committing to a clear directional move.
That catalyst could arrive later this week through US inflation data scheduled for Thursday and Friday.
The reports could influence expectations surrounding the Federal Reserve’s next interest-rate decision. Therefore, Bitcoin traders may closely monitor the data for signs of another significant market move.
QCP noted that the current decline in volatility suggests traders are waiting for more clarity rather than aggressively positioning for either higher or lower prices.
The firm expects the possibility of a stronger directional breakout once the inflation figures are released.
Bitcoin Shows Resilience Despite Narrow Range
Bitcoin has traded within a relatively tight range since August 21.
However, BTC has still retained most of the gains generated during its strong move earlier in the previous month.
Bitcoin had climbed roughly 25% during that period, and analysts believe its ability to hold much of that advance remains an important technical signal.
BTC/USD one-day chart. Source: Cointelegraph/TradingView
Ryan Lee, chief analyst at Bitget, also highlighted Bitcoin’s resilience following recent US economic data.
Last week, markets reacted to stronger-than-expected nonfarm payroll figures.
Stronger employment data can place upward pressure on US Treasury yields and the dollar. Normally, that creates more difficult conditions for risk assets such as Bitcoin.
Despite those pressures, Bitcoin avoided a major breakdown.
Lee argued that the market’s response suggests investors are considering more than just expectations surrounding future Federal Reserve interest-rate decisions when valuing Bitcoin.
Bitcoin ETFs Remain in Focus
US spot Bitcoin exchange-traded funds are another important factor for the market.
The ETFs recently recorded approximately $730 million in net inflows during Thursday’s session.
That represented their strongest single-day inflow total since January.
Continued institutional demand through spot Bitcoin ETFs could therefore remain an important factor as traders watch whether BTC can reclaim and hold the $80,000 level.
For now, Bitcoin remains caught between nearby liquidity zones while traders await the next major US inflation readings.
The reaction to those figures could determine whether Bitcoin can move back above $80,000 or face another test of lower support levels.
