Bitcoin staged a notable rally following last week’s FOMC meeting, recovering from a dip below $75,000 to surge to nearly $83,000 on May 6 — its highest level since late January. The rebound added roughly $8,000 in less than a week, but a subsequent sell-off by bearish traders pushed the price down more than $3,000, leaving the cryptocurrency below an important technical threshold.
Market analyst Ali Martinez, who shares regular updates to his large social following, highlighted that this decline has driven bitcoin beneath a key support level, which now functions as resistance. According to Martinez, the $80,300 mark represents the average cost basis of new whales — sizable investors who entered the market within the last 155 days. Because many of these large buyers paid near that level, the current trading price sitting below $80,300 places them at a paper loss.
Below $80.3K
Martinez explained that when BTC trades below the average cost basis of recent whale activity, those whales are incentivized to sell in order to break even or to limit further losses. This selling pressure can create a cascade that pushes the price significantly lower. Although bitcoin briefly reached a high of $82,800 before retreating, its failure to sustain levels above $80,300 is notable because the level now acts as resistance rather than support.
Conversely, if bitcoin manages to reclaim and hold $80,300 as strong support, it could indicate that selling pressure has been exhausted. Once whales move back into profitability, they are less likely to sell and more likely to hold positions for higher targets. Martinez notes this shift from selling to holding as a common catalyst for the start of a new upward trend.
Risk Appetite Rockets
In a separate commentary, Martinez warned that traders’ appetite for risk has surged to its highest point in nearly a year. Drawing on data from major exchanges, he pointed to the Estimated Leverage Ratio reaching a 2026 peak. This metric reflects the degree to which traders are using borrowed capital to increase their exposure, signaling that market participants are aggressively positioning for the next price move.
High leverage amplifies both upside and downside. While elevated leverage can accelerate a bullish breakout when price moves favorably, it also raises the likelihood of cascading liquidations if the market reverses sharply. Martinez emphasized that the market becomes highly sensitive under these conditions, as a rapid price swing can trigger automatic closings of leveraged positions and exacerbate the downturn.
Historical examples underline this risk: during the early October sell-off, the market experienced one of the largest liquidation events in crypto history, with more than $19 billion of leveraged positions wiped out in a single day as prices plunged. That episode illustrates how quickly leveraged markets can unwind and why a high Estimated Leverage Ratio warrants caution.
Overall, the combination of bitcoin trading below the significant $80,300 price point and record-high leverage readings suggests a delicate short-term outlook. If sellers persist, the market could see renewed downside pressure as recently entered whales seek to avoid further losses. If instead bitcoin flips $80,300 back into support, it could remove a major psychological barrier and reduce the incentive for those whales to sell, potentially laying the groundwork for renewed upside momentum.