Bitcoin slide below US$85,000 leads to US$1 billion in liquidations

The digital currency is down more than 30 per cent from an all-time high on Oct 6

Published Fri, Jan 30, 2026 · 07:28 AM

BITCOIN can’t catch a break these days. First, traders were decamping from cryptocurrencies to gold and silver as a macro hedge for the falling dollar. Now, Bitcoin is falling with precious metals in a broad risk-off trade, reaffirming its status as leveraged beta to risk assets.

The original cryptocurrency dropped below US$85,000 on Thursday for the first time in two months, slumping as much as 6.8 per cent to US$83,240. That’s the lowest price since Nov 21.

Smaller digital assets fell more, with Ether, Doge, Cardano and Solana all down at least 7 per cent or more. More than US$1 billion in leveraged positions have been wiped out.

The latest plunge follows a downturn that has lasted since early October. Bitcoin prices had remained stagnant even when tech shares and precious metals such as gold and silver rallied in recent weeks. The digital currency is down more than 30 per cent from an all-time high reached on Oct 6.

“Today’s weakness underscores crypto’s persistent role as leveraged beta to traditional risk assets, with digital markets amplifying the broader risk-off tone as equities - particularly tech - continue to face pressure.” said Chris Newhouse, head of business development at Ergonia. “The move lower is being compounded by leveraged position liquidations as over-leveraged longs get flushed, adding mechanical selling pressure to an already fragile tape.”

Liquidations in crypto assets are accelerating amid the sharp drop with over US$1 billion worth of digital assets wiped out over the last 24 hours with US$923 million and US$120 million in long and bearish positions, respectively, according to data compiled by Coinglass.

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“Derivatives positioning remains defensive.” said Jake Ostrovskis, head of over-the-counter trading at Wintermute.

Open interest for Bitcoin futures contracts on CME is hovering around yearly lows, while perpetual futures funding rates, a key measure of market sentiment, sits near neutral, signaling limited speculative conviction.

The slide weighed on the shares of companies in the crypto sector. Digital exchange Coinbase Global declined more than 6 per cent, Bitcoin accumulator Strategy tumbled 11 per cent and miner MARA Holdings slumped more than 6 per cent.

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Adding to the pressure has been the unwinding of popular strategies such as the yen carry trade in traditional markets, according to Matt Maley, chief market strategist at Miller Tabak & Co. The strategy involves borrowing the relatively low-yielding yen and investing in other currencies offering higher returns.

“Bitcoin and other cryptocurrencies are assets that tend to move with liquidity. When liquidity is more plentiful, cryptos rally, and when it’s less plentiful, they decline,” Maley said. “Well, one of the best indicators for the level of liquidity in the system is the yen carry trade.”

Investors are now eyeing the US$80,000 price level for support, he said. BLOOMBERG

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