The "flash crash" in the crypto market on January 19, 2026, was primarily triggered by sudden geopolitical and tariff tensions between Europe and the United States. The market's short-term trend was thus disrupted, but on-chain data also showed positive signs of bottom-fishing.
📉 In-depth Analysis of Sudden Drop Causes
This decline is a typical external macro risk shock, with reasons concentrated on the following three points:
1. Direct Trigger: Escalating Tariff Threats from Europe and the United States
· Event: Last weekend, former U.S. President Trump issued tariff threats to several European countries regarding Greenland. In response, the European Union is considering imposing tariffs on U.S. goods worth €93 billion.
· Market impact: This news triggered a spike in global risk aversion on Monday (January 19), with traditional financial markets reacting sharply (Nasdaq futures down 1%, gold and silver hitting new highs), and the crypto market being sold off as a high-risk asset.
2. Market performance: Market 'flash crash' data
· Bitcoin's maximum decline in about 1 hour reached 3.79%, with prices rapidly dropping from about $95,500 to around $91,900.
· The total contract liquidation amount across the network reached $684 million in 24 hours, with nearly 240,000 people liquidated, showing that high-leverage positions were concentrated and cleared.
3. In-depth market background
· Macro pressure: The market generally expects a high probability (up to 95%) that the Federal Reserve will keep interest rates unchanged at the January meeting, and the high-interest environment continues to suppress risk assets.
· Technical structure: Before the sharp drop, Bitcoin encountered strong resistance around $98,000 during its rebound, and the price was running below key moving averages, presenting adjustment pressure.
📈 This week's trend and operational ideas
After the sharp drop, the market enters a key game zone. Here are the core elements to focus on this week:
Key ranges and bull-bear factors
· Core range: Bitcoin oscillates between $92,000 (key support) and $96,500-$98,000 (key resistance).
· Bullish supporting factors:
· Institutions/large traders bottom-fishing: On-chain data shows that 'whale' addresses bought over 34,000 BTC in the past week against the trend. Meanwhile, Bitcoin spot ETFs recorded a net inflow of about $1.42 billion last week (January 12-16).
· Supply tightening: Over 19,700 BTC have flowed out of exchanges in a short period, reducing exchange inventory to low levels and decreasing direct selling pressure.
· Bearish risk factors:
· Macro uncertainty: The US-EU tariff dispute and Federal Reserve policies remain the biggest variables.
· Upper trapped positions: There is a large amount of historical trapped selling around the range of $97,000 to $117,400, and breaking through requires substantial funds.
· Potential liquidation risk: Some analysts point out that the market may still experience a significant 'risk liquidation event' in the first half of the year, leading to a deep correction.
Short-term operational ideas and suggestions
· Overall strategy: Buy low and sell high within the core range, avoiding chasing prices. Current market sentiment is neutral (Fear and Greed Index 50), with no extreme panic observed; operations need to be more cautious.
· Key risk control positions:
· Bull-bear demarcation line: Closely observe the support at $92,000. If it breaks down with volume, the short-term trend may weaken, and further downside risk needs to be guarded against.
· Breakout confirmation point: If the price rebounds and strongly stabilizes above $96,500, it may test the $98,000-$100,000 range again.
· Specific operational advice:
1. Holders: Set $92,000 as a stop-loss reference. If the price rebounds to the $96,000-$98,000 resistance zone with low volume, consider partially reducing positions.
2. Observers: Do not rush to bottom-fish. Wait for two scenarios:
· Scenario one: After a clear stop-loss signal (such as a long lower shadow) appears near $92,000, consider a small position entry, with the stop-loss set below that support.
· Scenario two: After the price breaks through $96,500 with volume, wait for a pullback confirmation before following up.
3. General discipline: Regardless of long or short positions, single trade losses are strictly controlled within 5%; prioritize trading mainstream assets like BTC and ETH, avoiding high-volatility small-cap or meme coins.
