The Bitcoin price gave up the psychological stronghold of $90,000 during early Asian trading hours on January 21, marking a decisive collapse that has effectively erased the asset’s gains before the start of 2026.
According to Crypto Slates The world’s largest digital asset plummeted to a session low of $87,282 over the past 24 hours, according to data.
This downturn was not an isolated event, but part of a broader, market-wide sell-off that severely damaged the digital asset ecosystem. Major alternative cryptocurrencies including Ethereum, XRP, Cardano and Solana all posted significant losses, mirroring the leader’s decline.
Meanwhile, the sharp reversal marks the culmination of a brutal two-day decline that has pushed the emerging industry back to price levels last seen in late 2025 and shattered the bullish momentum that had marked the first weeks of the new year.
Use flushes and aggressive selling
While price corrections are standard in crypto markets, the speed of this decline points to a toxic combination of derivative liquidations and real supply shocks.
The speed of this move was most evident in the futures markets, where ‘liquidation cascades’ (a scenario in which falling prices trigger forced sell orders, which in turn drive prices down) accelerated the decline.
Facts from CoinGlass reveals the extent of the damage. Traders with long positions (who bet on price increases) suffered more than $1.5 billion in losses in the past 48 hours.
This figure represents the capitulation of bulls who had positioned themselves for a breakout above $100,000, but were then sidelined when Bitcoin failed to maintain support around the upper $90,000.
However, this price drop was not simply a result of excessive speculation. Unlike ‘scammers’ who are quickly bought up, this move was supported by aggressive selling in the spot market, the actual exchange of assets.
CryptoQuant’s “Net Buyer Volume,” a critical metric that measures market aggression by tracking whether traders are buying or selling, recorded a negative reading of -$319 million on January 20.
This very negative figure indicated that motivated sellers were aggressively bidding to exit their positions, overwhelming available liquidity.
Notably, this is the second time the indicator has fallen below minus $300 million in recent days. The previous incident occurred on January 16, when Bitcoin was still trading above $95,000.
What further exacerbates the bearish outlook is the behavior of whale investors.
CryptoQuant’s Whale Screener, which tracks deposits from more than 100 active high-net-worth wallets, has detected an increase in supply to the exchanges.
Whales deposited more than $400 million worth of Bitcoin on spot exchanges on January 20, following a similar peak of $500 million on January 15.
Historically, large deposits on spot exchanges have reliably preceded selling pressure, or at least created a wall of demand liquidity that dampens any potential price recovery.
Furthermore, negative market sentiment was confirmed by the performance of spot Bitcoin ETFs over the past two days.
According to SoSo value factsThe 12 funds have seen outflows of nearly $900 million over the last two trading sessions, further exacerbating the market’s current downtrend.
The macro headwinds and the “Japanese” phenomenon
In addition to the crypto market’s internal mechanisms, a complex and increasingly hostile macroeconomic backdrop is exerting serious downward pressure.
Market headlines have been dominated by a phenomenon analysts call “Japanese,” a contagion effect originating in the Japanese bond market that is destabilizing global risk assets.
Presto research argued that the true epicenter of the current market stress is Tokyo, not the United States.
According to the company, a chaotic sell-off in Japanese government bonds (JGBs) has spread to broader international markets, leading to a ‘Sell America’ trade. In this environment, correlations have converged, causing stocks, US Treasuries, the dollar and Bitcoin to fall together as liquidity is drained from the system.
The catalyst for this volatility was a surprisingly weak auction for 20-year Japanese government bonds. The bid-to-cover ratio (a primary measure of demand) fell to 3.19 at Tuesday’s auction, down significantly from 4.1 previously.
This signals declining demand for Japanese government bonds, at a time when the market is already nervous about Japan’s fiscal health.
The Kobeissi letter as long as Further context on this capital flight, noting that Japanese insurers sold $5.2 billion worth of bonds with maturities of ten years or longer in December.
This was the largest monthly sale since data collection began in 2004 and the fifth consecutive month of net sales.
As Japanese institutions (historically among the largest foreign holders of global debt) retreat to domestic security, global liquidity tightens, leaving risk assets like Bitcoin vulnerable.
Analysts at Bitunix highlighted the duality of this moment for digital assets in a statement shared with CryptoSlate.
According to the company, the sharp dislocation in government bond markets once again underlines the fragility of traditional safe haven assets. They noted that in the short term, simultaneous pressure on bonds and risky assets could dampen risk appetite in the crypto markets.
However, Bitunix analysts also pointed to a potential long-term twist inherent in this chaos. If the politicization of bond markets and monetary intervention become persistent features in the medium term, these dynamics could strengthen Bitcoin’s allocation as a non-sovereign asset.
They concluded that in the longer term, the continued erosion of global interest rate and currency stability may ultimately lead to a repricing of the strategic weight of crypto assets within the portfolio allocation.
This instability has fueled intense speculation about the Bank of Japan’s next move ahead of the February 8 snap elections.
Presto Research outlines two binary outcomes: a ‘Liz Truss’ moment, referring to the 2022 UK bond market revolt caused by budget mismanagement, or a return to ‘fiscal dominance’, with the central bank forced to aggressively print money to cap interest rates.
At the same time, friction in trade policy creates a new layer of uncertainty.
Matrixport notes that the Bitcoin options market has seen a decisive shift in sentiment, with demand for “puts” (downside protection) exceeding “calls.”
The company attributes this defensive positioning to President Donald Trump’s renewed threat of tariffs of 10% to 25% on European goods, which has prompted institutional investors to hedge against near-term macro volatility.
What’s next for Bitcoin
Despite the continued gloom, not all indicators point to a prolonged bear market.
Glassnode’s weekly analysis features the current setup as a ‘momentum slip’, a cooling of an overheated market that remains statistically ‘above neutral’.
However, the technical reality on the charts remains precarious.
CryptoQuant analyst Axel Adler Jr. has identified the $89,800-$90,000 range as the critical line of defense for bulls.
This price range is important because it represents the “cost basis” (the average purchase price) for the newest buyers in the market, especially the cohorts of Short-Term Holders who have entered within the last day to the last month.
Adler warns that a sustained collapse below this band will simultaneously push these cohorts underwater. When speculators book unrealized losses in the short term, they become highly sensitive to price declines, increasing the risk of panic selling, which could accelerate the downtrend.
Meanwhile, the path to the upside is littered with resistance even if Bitcoin manages to bounce back. The 1-3 month holder cohort has a cost base of approximately $92,500.
Since these traders are currently suffering losses, they will likely sell in any relief rallies to break even, creating natural selling pressure.
Furthermore, the total realized price for all short-term holders is $99,300, essentially creating a formidable ceiling that must be breached to revive the bullish belief.
For now, Bitcoin is in a delicate balance. It is caught between an aggressive liquidation wave and a hostile macro environment, with the $90,000 level marking the dividing line between consolidation and a deeper correction.