- Bitcoin and Ethereum prices plunge amid selling pressure fueled by strong U.S. economic data.
- Over 204,000 traders liquidated, with $627M in losses primarily from long positions.
- Market sentiment is driven by fears of reduced Federal Reserve liquidity support.
The cryptocurrency market has faced a significant downturn as Bitcoin (BTC) and Ethereum (ETH) experienced sharp declines, with Bitcoin sliding to $95,433—a 7% drop from its recent highs.
While short-term sentiment remains bearish, some positive indicators provide a glimmer of hope. Exchanges like Coinbase reported a rise in buying momentum for Ethereum, driven by favorable ETF activity earlier in the week.
Crypto Chaos: Bitcoin Drops to $96K, Thousands Liquidated in Market Crash
The crypto market suffered a severe setback, with Bitcoin and Ethereum leading a market-wide downturn. Bitcoin fell by 7%, trading at $95,433, marking a sharp contrast to its recent highs above $103,000. Ethereum experienced an even steeper decline, with its value dropping by 9% to $3,339. The volatility wiped out $627 million, leaving over 204,000 traders liquidated.
The downturn coincided with the release of strong U.S. economic data, including higher-than-expected job openings for November 2024. This development dampened investor expectations of Federal Reserve interest rate cuts, reducing liquidity inflows into high-risk assets like cryptocurrencies. Binance recorded its highest negative Net Taker Volume of $325 million in 2025, underscoring the intense selling pressure.
While Bitcoin’s market cap slipped to $1.89 trillion, Ethereum’s decline raised questions about its ability to maintain momentum despite strong ETF inflows earlier this week. Ethereum ETFs saw a net outflow of $86 million, adding to the bearish sentiment. Yet, some buying momentum on platforms like Coinbase suggests resilience among investors anticipating a recovery.
Broader macroeconomic factors continue to dominate market movements. The upcoming Federal Reserve meeting on January 29 and global economic events add layers of uncertainty. Market watchers caution against making hasty moves, urging traders to monitor liquidity trends closely before re-entering the market.
The crypto market’s current turbulence highlights the delicate interplay between macroeconomic factors and asset performance, reminding traders to remain vigilant and adaptive.
“Markets are never wrong; opinions often are.” – Jesse Livermore
