In the center of the move, Nasdaq Crypto Index slipped around 4,495fell more than 23%reflecting the weakness of Bitcoin, Ethereum and large-cap altcoins. bitcoin fell near 2.7%floating nearby $92,500while Ethereum lost about 3.6% trade nearby $3,190. XRP, Litecoinand other major tokens also recorded losses between 1.5% and 3%.
The main catalyst for this week’s volatility comes from a sudden change in the macroeconomic outlook. The geopolitical uncertainty surrounding President Donald Trump’s proposal to acquire Greenland (and the subsequent threat of tariffs against European nations) has sent shockwaves through both stock and digital asset markets.
As investors pivoted to traditional safe havens like gold, which hit all-time highs above $4,600, Bitcoin saw nearly $500 million in leveraged long positions liquidated in a single hour. This sudden drop has redefined the short-term outlook, as analysts eye a possible bottom between $71,000 and $84,000.
The current price development reveals a harsh reality: Bitcoin currently tracks risk assets more closely than as a “digital gold” hedge. When the BTC/USD pair fell almost 5.3% this month, the market witnessed unprecedented sell-offs. Total cryptocurrency liquidations surpassed $525 million following news that the United States could impose a 10% tariff on several NATO members. This move has reignited trade war anxiety, putting pressure not only on Bitcoin, but also Ethereum (ETH) and Solana (SOL).
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Ethereum has seen even steeper declines than the market leader, falling below the $3,100 mark while losing nearly 4% of its value in a 24-hour period.
Market participants are increasingly cautious, and the Crypto Fear & Greed Index remains in “fear” territory. While some altcoins like XRP have shown relative resilience, trading near $1.93 with smaller percentage drops, the overall trend suggests a “Wave IV” corrective structure. Technical experts warn that unless buyers step in to reclaim the $104,000 level, the market could see another leg down before a significant recovery begins.
This sell-off follows several sessions of range-bound trading and comes amid tight liquidity, ETF outflows, and a growing debate over whether Bitcoin is forming a corrective base or preparing for another leg lower. While long-term sentiment remains constructive, short-term signals point to caution.
Cryptocurrency Prices Fall Across the Board as Market Cap Falls 3%
The latest price action shows synchronized declines in large-cap cryptocurrencies. Bitcoin traded between $91,000 and $93,000depending on the location, marking one of its weakest daily closes this month. Ethereum fell below key short-term support near $3,200raising concerns about deeper consolidation.
Among other specialties, Dogecoin almost fell 8% around $0.126making it the worst performer among the top 10 tokens. solarium declined on 6.7% to $133while tron proved to be relatively resilient, barely falling 0.5% near $0.317.
The damage extended far beyond the upper level. Within the top 100 coins by market value, 10 tokens posted double-digit losses. Aster fell sharply 12.7%while Sui dropped 12.5%. Only a handful of assets traded higher, led by Dashwho won more 9%and Moneroup on 6%.
Market breadth remains a key concern. When almost all large tokens fall simultaneously, it often indicates macro-driven selling rather than asset-specific news. Traders point to ETF flows, derivatives positioning and reduced weekend liquidity as contributing factors.
Bitcoin Technical Outlook Indicates Consolidation, Not Panic
Despite the strong daily movement, analysts caution against interpreting the drop as the end of the broader bull cycle. According to market technicians, Bitcoin is currently in Wave IV of a further multi-year upward trend. This corrective phase typically involves choppy price action and multiple tests of support.
John Glover, chief investment officer of Lednrecently noted that the current corrective structure resembles a classic abc patternwith possible downward objectives between $71,000 and $84,000 if the selling pressure accelerates. Importantly, this scenario still fits within a long-term bullish framework.
To confirm the rise, analysts expect a decisive close above $104,000which would suggest the beginning of Wave Voften the strongest phase of a bull market. Until then, Bitcoin may continue to trade sideways or decline as buyers wait for clearer signals.
On-chain data adds nuance. Bitcoin network growth has slowed and the hash rate recently hit multi-month lows, although whale selling has moderated. These contradictory signals reinforce the idea of consolidation rather than capitulation.
US Crypto ETFs Show Strong Bitcoin Outflows, Modest Ethereum Inflows
Institutional flows remain a major driver of near-term price action. US-listed Bitcoin spot exchange-traded funds ended last week with $394.68 million in net outflowsbreaking a recent streak of entries. Total cumulative net inflows fell below 58 billion dollarssettling nearby $57.82 billion.
Of the twelve Bitcoin ETFs, only one recorded positive flows. black rock led with entries of approximately $15 millionwhile gray scale recorded the largest departures with more than $205 millionfollowed by Bitwise in approx. $90 million.
Ethereum ETFs painted a more stable picture. On January 16, US Ether spot ETFs collectively posted $4.64 million in ticketsmarking your fifth consecutive day of net positives. Total net inflows remained stable near $12.9 billionwith BlackRock again leading the upside and Grayscale posting modest redemptions.
The divergence suggests that investors are selectively reallocating rather than completely abandoning cryptocurrency exposure, favoring the growth of the Ethereum ecosystem and betting on the narrative around Bitcoin’s near-term volatility.
Adoption headlines contrast with near-term market weakness
Even as prices drop, adoption and institutional interest continue to increase. mortgage lender Newrez announced plans to allow qualified borrowers to include Bitcoin, Ethereum, and select stablecoins as assets in their mortgage underwriting process. The policy, expected to roll out in February, will apply to all non-agency products, including home purchases and refinances, without requiring borrowers to liquidate their cryptocurrency holdings.
In the business sector, reports indicate Anchorage Digital is exploring a financing round of up to $400 million ahead of a potential IPO, indicating continued confidence in regulated crypto infrastructure. Meanwhile, Steak and shake revealed a Purchase of Bitcoin for 10 million dollars for its treasury, joining the growing list of companies that use cryptocurrencies as a balance sheet asset.
These developments highlight the current disconnect between short-term price action and long-term adoption trends. While sentiment remains cautious and further declines cannot be ruled out, structural support for digital assets continues to strengthen beneath the surface.