Bitcoin’s recent decline below the $90,000 mark has led to significant liquidations amounting to $478 million in leveraged positions, with long positions making up over 90% of these liquidations. This downturn comes on the heels of a promising start to the year, during which Bitcoin, along with major altcoins like Dogecoin, Bonk, Pepe, and ZCash, experienced notable double-digit gains. However, an overall downturn seems to have gripped the crypto market as these altcoins have mirrored Bitcoin’s performance, suffering substantial losses.
Market analysts have attributed this sudden drop in momentum to several factors. They point to a fading enthusiasm for cryptocurrency as the initial excitement of the new year wanes. The prevailing risk-off sentiment in the broader market, particularly ahead of the imminent U.S. jobs data, has further contributed to this decline. Additionally, recent outflows from Bitcoin exchange-traded funds (ETFs) have introduced short-term headwinds that exacerbate the situation.
As of the latest data from CoinGecko, Bitcoin is trading at $89,881, down 2.4% over a 24-hour period. The overall cryptocurrency market capitalization, which recently peaked at $3.305 trillion, has since dropped by 2.6%. This downward trend has significantly impacted liquidations within the market, as informed by CoinGlass data. Traders who had anticipated a continuation of the early-year bullish sentiment are now facing harsh realities as their positions succumb to market pressure.
In tandem with Bitcoin’s drop, Ethereum and XRP are also experiencing downward movements, with respective losses of 3.9% and 7.6%. Meanwhile, meme tokens that previously saw explosive growth, like Pepe and Bonk, are also recording retracements of 6.6% and 8%. Analysts suggest that this collective drop reflects a broader trend of investors pulling back amid uncertainties.
Illia Otychenko, a Lead Analyst at CEX.IO, remarked that Bitcoin’s move below $90,000 indicates a loss of momentum that initially characterized the market’s early 2026 rally. Although fresh capital inflows and encouraging geopolitical developments initially buoyed investor sentiment, they have failed to maintain the upward trajectory.
Wenny Cai, COO at SynFutures, echoed these sentiments, explaining that the current market environment is marked by a palpable risk-off sentiment, with investors positioning themselves cautiously ahead of key macroeconomic indicators, including U.S. jobs reports. This cautious approach has dampened risk appetite, subsequently constraining Bitcoin’s ability to maintain prices above $90,000. With prediction market Myriad suggesting just a 24.5% chance of Bitcoin reaching a new all-time high before July, bearish sentiment appears to be rooted firmly among traders.
The recent pullback has been further fueled by a wave of outflows from Bitcoin ETFs, which have totaled $243 million, according to Otychenko. He emphasized that although ETF inflows can enhance the market’s structural health, their current outflows have created immediate headwinds and reduced buying pressure for Bitcoin. Both analysts believe that the current liquidity conditions in the crypto market are contributing to heightened volatility, with thinner trading volumes exacerbating price fluctuations. Otychenko noted that the market’s outlook may improve if Bitcoin manages to bounce back following the impending U.S. jobs data release.
In summary, the cryptocurrency market finds itself at a crossroads, navigating through a combination of slipping prices, weakened investor sentiment, and macroeconomic uncertainties that threaten to overshadow early-year gains.
