Bitcoin Drops Below $80K as Iran Rejects U.S. Proposal

Bitcoin fell below $80,000 on May 7 after Iran rejected a U.S. proposal, erasing weekly gains and prompting liquidations across crypto markets.

The top cryptocurrency hit a multi-month high of $82,833 about 24 hours earlier but came under selling pressure beginning Wednesday afternoon. After a roughly $1,000 slide from midday to midnight, bitcoin found temporary support near $80,700. A brief rebound lifted the price to around $81,600 before selling intensified and pushed the intraday low to $79,500. By early afternoon EDT the price had recovered slightly and traded just under $80,000.

The volatility reduced bitcoin’s market capitalization to below $1.6 trillion from an intraday peak near $1.66 trillion. The wider crypto market cap fell to about $2.74 trillion from just over $2.8 trillion. Across the crypto economy, nearly $270 million in leveraged positions were liquidated during the 24-hour period, with roughly $91 million in bitcoin long positions and about $12 million in bitcoin short positions closed out.

Market participants linked the swing to reports that Iran rejected the U.S. proposal intended to end hostilities. Mohsen Rezaei, a senior Iranian official, wrote on social media that the plan was refused because “it does not include reparations for war damage.” The rejection reduced earlier optimism about a diplomatic resolution and coincided with a broader retreat on Wall Street.

Some investors expressed concern that a prolonged diplomatic stalemate could strengthen advocates of military action in Washington. Traders pointed to high levels of leverage on exchanges as a factor that can amplify price moves when sentiment shifts.

Trading activity showed short-term sellers dominated after the late-night pullback, while longer-term holders absorbed some of the volatility. Bitcoin remained up nearly 5% since the start of the month and more than 15% over the prior 30 days despite the decline.