The cryptocurrency market witnessed a significant sell-off as Bitcoin’s price tumbled below the psychologically critical $90,000 threshold. Trading near $89,300 on January 21, 2026, the asset recorded its sixth consecutive daily decline, signaling mounting anxiety among investors. This downturn triggered a liquidation event exceeding $1 billion for leveraged trades, catching numerous market participants off guard.
A Cascade of Liquidations
Data from CoinGlass reveals the scale of the shakeout: approximately 183,066 traders saw their positions liquidated within a 24-hour window, with the total value reaching $1.09 billion. A striking 92% of these liquidations involved long positions, indicating that a vast majority of affected traders had bet on continued price appreciation. The single largest liquidation order occurred on the Bitget exchange, a BTCUSDT trade valued at $13.52 million.
Bitcoin has been losing ground steadily since hitting a mid-January peak of $95,099. The decline saw the digital currency briefly touch a low near $87,800 before staging a modest recovery.
Macroeconomic Headwinds Weigh on Risk Sentiment
Bitcoin’s weakness is part of a broader “risk-off” shift in global markets, driven by several macroeconomic developments:
- Trade Policy Concerns: Renewed threats from Donald Trump to impose tariffs on European nations have unsettled markets, reviving memories of prior trade conflicts.
- Japanese Bond Sell-Off: A sharp sell-off in Japanese Government Bonds (JGBs) has pushed yields to multi-year highs. Notably, the yield on 40-year bonds reached its highest level in decades, suggesting the Bank of Japan may continue its path of interest rate hikes.
- Gold’s Divergent Path: Highlighting Bitcoin’s current characterization as a risk asset, gold prices surged to a record high of $4,850 per ounce—a gain of $260 in just 48 hours. This divergence challenges the narrative of Bitcoin as “digital gold” during periods of market stress.
Institutional Accumulation Persists Amid Decline
Despite the falling prices, prominent institutional buyers remain active. Michael Saylor’s Strategy (formerly MicroStrategy) executed its largest single Bitcoin purchase in over nine months, acquiring 22,305 BTC for approximately $2.13 billion. The average purchase price was $95,284 per coin. With this addition, Strategy’s total holdings now stand at 709,715 BTC, worth an estimated $53.92 billion, with an average cost basis of $75,979 per Bitcoin.
Should investors sell immediately? Or is it worth buying Bitcoin?
The picture for U.S. spot Bitcoin ETFs is more nuanced. While fund flows stabilized after experiencing outflows at the end of 2025, the most recent two-day period saw a return to net withdrawals, hinting at softening short-term demand from this investor cohort.
Technical and On-Chain Analysis Points to Caution
On-chain metrics from Glassnode indicate Bitcoin entered 2026 following a corrective phase. The Short-Term Holder MVRV Ratio has recovered from 0.79 to 0.95. This figure suggests that investors who purchased coins recently are, on average, still holding at a 5% loss. Market analysts note that the probability of further downward movement remains elevated as long as this ratio stays below the 1.0 level.
Key technical support zones are now identified between $88,000 and $93,000, with a stronger band between $80,000 and $83,000. Major resistance is expected in the $98,000 to $100,000 range, with the all-time high zone between $124,000 and $126,500 acting as the ultimate ceiling.
Market experts offer a tempered outlook. Analysts like Tom Lee of Fundstrat anticipate continued pressure from tariffs and political tensions but project a recovery later in 2026. Geoffrey Kendrick of Standard Chartered maintains a positive long-term view, contingent on the easing of current macro headwinds. Echoing this sentiment, Coinbase CEO Brian Armstrong characterized the correction as a temporary setback during discussions at the World Economic Forum in Davos.
Ad
Bitcoin Stock: Buy or Sell?! New Bitcoin Analysis from January 21 delivers the answer:
The latest Bitcoin figures speak for themselves: Urgent action needed for Bitcoin investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from January 21.
Bitcoin: Buy or sell? Read more here...