Bitcoin (BTC) fell nearly 2% on Monday, giving up its weekend gains above the $80,000 level as thin trading conditions during the US Labor Day holiday weighed on market momentum.
BTC had posted its first weekly close above $80,000 since early May, but the cryptocurrency subsequently retreated as traders remained cautious ahead of key US inflation data due later this week.
With US markets closed for the holiday, thinner order books increased the possibility of sharp short-term price movements as traders targeted liquidity above and below Bitcoin’s spot price.
Data showed that crypto liquidations were relatively balanced between long and short positions, with total liquidations across the cryptocurrency market reaching approximately $178 million over 24 hours.
Short-term liquidity remained concentrated around $80,500 and $78,800, creating potential levels for Bitcoin’s next move.
Trading firm QCP Capital highlighted declining market volatility and said traders appeared to be waiting for a major external catalyst.
The firm expects upcoming US inflation data to play a key role in shaping expectations for Federal Reserve interest-rate policy. The data releases scheduled for Thursday and Friday could therefore have a significant impact on Bitcoin and broader risk assets.
QCP Capital said the market appears to be positioned for a potential directional move once the inflation figures provide greater clarity.
Despite trading within a relatively narrow range since August 21, Bitcoin has retained most of its gains from the previous month.
Market analysts have pointed to this resilience as a positive sign, particularly as BTC continues to hold near the $80,000 level despite declining volatility.
For now, traders remain focused on whether Bitcoin can reclaim and hold above $80,000, with upcoming US inflation data likely to provide the next major catalyst for the cryptocurrency market.
