Bitcoin experienced a sharp sell-off over the weekend, falling more than 7% amid thin liquidity conditions that amplified price volatility. The sudden drop triggered a massive wave of liquidations, with approximately $800 million wiped out initially, and total liquidations exceeding $2.2 billion within 24 hours across the broader crypto market.
Bitcoin Loses a Key Psychological Level
BTC fell below the $80,000 mark for the first time since April 2025, briefly dipping under $76,000 before attempting a modest rebound. The decline pushed Bitcoin dangerously close to its April 2025 local low near $74,500, a level now closely watched by traders and analysts.
According to Keith Alan, co-founder of Material Indicators, the previously identified local bottom at $80,500 has been decisively breached, signaling a clear loss of short-term structural support.
Meanwhile, analyst On-Chain College highlighted that Bitcoin has now dropped below its “true market mean”, currently estimated at around $80,700. This metric represents the average cost basis of circulating BTC supply.
Notably, this is the first time Bitcoin has traded below this level since October 2023, a development widely interpreted as a bearish signal for both short- and medium-term trends.
If selling pressure continues, deeper support zones are being monitored, with $69,000 standing out as a critical level — corresponding to the peak of the 2021 bull cycle.
Strategy Faces Unrealized Losses on Massive Bitcoin Holdings
The downturn is placing significant pressure on Strategy, the largest publicly listed corporate holder of Bitcoin. The company holds over 700,000 BTC, with an average acquisition price of approximately $76,037 per coin.
As Bitcoin briefly traded below this level, Strategy’s Bitcoin treasury entered unrealized loss territory, raising concerns among investors. Reflecting this stress, Strategy’s stock is currently trading near $143, down nearly 70% from its local peak of $455 recorded in July last year.
Bitcoin and Ether ETFs See Aggressive Capital Outflows
Institutional sentiment weakened notably as U.S. spot Bitcoin ETFs recorded heavy net outflows throughout January.
$1.49 billion was withdrawn during the final week of the month
$818 million exited the market in a single day (Wednesday), marking the largest daily ETF outflow of 2026 so far
An additional $510 million followed on Thursday
In total, January closed with approximately $1.6 billion in net outflows, making it one of the most severe selling months in the history of Bitcoin ETFs. This sharp reversal comes after a strong start to the year, when ETFs attracted over $1.16 billion in just the first two trading days of 2026.
Spot Ether ETFs mirrored this negative trend, recording $353 million in net outflows for the month. Notably, $253 million of that figure occurred on a single day, primarily driven by selling from BlackRock’s ETHA and Fidelity’s FETH funds.
During the same period, ETH briefly fell below $2,300, losing over 13% in 24 hours.
Solana and XRP ETFs Defy the Trend
Despite the broader risk-off environment, select altcoin ETFs continued to attract capital.
Solana ETFs recorded approximately $105 million in net inflows during January, extending the positive momentum of Bitwise’s BSOL fund.
XRP ETFs posted modest net inflows of around $16 million, although one mid-week session saw a sharp $93 million outflow, temporarily interrupting an otherwise positive streak.
These flows suggest selective institutional interest rather than broad-based exposure to crypto assets.
Macro Uncertainty Weighs on Market Sentiment
The synchronized outflows from both Bitcoin and Ether ETFs indicate that institutions are reducing overall crypto exposure, rather than rotating capital between assets — a notable shift from earlier in the month.
Risk appetite deteriorated further following the appointment of former Fed Governor Kevin Warsh as the next Federal Reserve Chair, a decision widely perceived by markets as less favorable toward risk assets.
Additional pressure stems from heightened geopolitical tensions, including the recent explosion at Iran’s Bandar Abbas port, as well as concerns over a potential temporary U.S. government shutdown.
Long-Term Institutional Interest Remains Intact
Despite the near-term volatility, the crypto ETF landscape continues to expand. Morgan Stanley has filed applications with the SEC to launch spot Bitcoin and Solana ETFs, reinforcing the view that institutional interest in digital assets remains strong over the long term, even amid sharp cyclical corrections.
Disclaimer
This article is for informational purposes only and reflects a personal blog perspective. It does not constitute investment advice. Readers should conduct their own research before making any investment decisions. The author assumes no responsibility for any financial losses incurred.
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