Bitcoin has dropped to $86,000, marking its lowest price since mid-December and sending fresh shockwaves through the crypto market.
On January 26, BTC fell nearly 1% in 24 hours and 5% over the week, breaking a key psychological level. This decline comes just 3.5 months after Bitcoin’s historic all-time high of $126,000, recorded on October 6, 2025. Since then, the deepest correction reached $80,600 on November 21, reminding traders how fast sentiment can flip.
The broader market is also feeling the pressure. Total crypto market capitalization has slipped below $3 trillion again, now sitting near $2.97 trillion.
Ethereum (ETH) briefly dropped to $2,780 before recovering to around $2,890, yet it remains down 1.5% daily and nearly 10% weekly. Among top assets, Solana (SOL) led losses in the top 10 with a 3% decline, while privacy coins Monero (XMR) and Dash (DASH) fell 5% each. The WLFI token from Trump’s World Liberty Financial project saw an even sharper 6% drop.
Leverage wiped traders out fast. In the past 24 hours alone, nearly 200,000 traders were liquidated, with total losses reaching $678 million. A massive 88% of these liquidations came from long positions, meaning bullish traders absorbed over $601 million in losses.
Market psychology has now flipped to panic mode. The Crypto Fear & Greed Index has plunged into “Extreme Fear” at 20/100, historically a zone where emotional selling accelerates — but also where long-term opportunities often begin to form.
One of the biggest pressure points is institutional money. Over the past week, U.S. spot Bitcoin ETF recorded net outflows of $1.33 billion, the second-largest weekly outflow since these ETFs launched. Ethereum ETFs weren’t spared either, seeing $611 million exit in the same period.
As fear dominates headlines, the market now faces a critical question:
Is this just another shakeout before the next leg up — or the start of a deeper correcti
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