The cryptocurrency market experienced a violent shake-up on Sunday, with Bitcoin slipping below $80,000 for the first time since April 2025 on Saturday and continuing its decline today to $78,800, a drop of 5% in the last 24 hours and 11.6% this week.
This sharp decline was the result of sustained selling pressure and a significant shortage of new capital inflows. During afternoon trading in New York, the world's largest cryptocurrency fell by 10% to $75,709.88, wiping out more than 30% of its value from its all-time high. Altcoins suffered even deeper losses, with Ethereum and Solana plummeting by more than 17%. This crash wiped out approximately $111 billion of the total crypto market capitalization and liquidated $1.6 billion in leveraged trading positions within just 24 hours.
Analysts, including Ki Young-joo of CryptoQuant, believe the market is experiencing a liquidity crunch, with Bitcoin's realized capital flattening. This suggests a halt in new inflows, coinciding with existing holders taking profits after months of heavy buying by exchange-traded funds (ETFs) and MicroStrategy. While the price drop below $76,037 has resulted in a slight unrealized loss for MicroStrategy, the company is not facing immediate financial pressure due to its cash reserves, and a catastrophic 70% collapse remains unlikely unless the company is forced to sell its holdings.
This decline comes amid a significant divergence between gold and Bitcoin. While gold soared above $5,300 as a safe haven against geopolitical tensions, Bitcoin failed to act as a hedge and was even negatively impacted by the strengthening US dollar following Kevin Warsh's appointment as Federal Reserve Chair, succeeding Jerome Powell. Delays in enacting market regulations in the US and the uncertainty surrounding the federal budget have also eroded investor confidence, suggesting a prolonged period of sideways trading and consolidation rather than a swift recovery.
Why are these levels important?
RSI below 23: Extreme overbought condition gives an incentive to speculators for a quick bounce, but this does not break the main downtrend.
Marubozu Downward (January 31): A strong candle confirms the dominance of sellers and the continuation of the negative momentum.
Resistances: 84,300–86,000 (broken resistance + 38.2% Fibonacci retracement) represent an ideal area to catch the trap of hasty buyers.
Risk Management and Education
Do not enter the neutral zone (76k–84k): High volatility and lack of a clear trend increase the likelihood of a rapid loss.
Sell on bounce only: If the price returns to resistance zones and rejection candles appear, it may be a selling opportunity with a tight stop loss.
Buying against the trend is risky: it requires strong confirmation of a reversal pattern (a clear double bottom and stability above 75,993).
