Bitcoin tumbled to around $83,500, marking its lowest level in over a month and triggering a wave of forced liquidations across the derivatives market.
In just 24 hours, nearly $1 billion worth of long and short positions were wiped out as leveraged bets unraveled in a rapid cascade.
The drop below the key $85,000 level accelerated selling pressure. Within minutes, thin order books amplified volatility and sent price spiraling lower. Traders who piled into aggressive long positions at leverage ratios as high as 2.2:1 were flushed out, with roughly $150 million liquidated in a single hour during the peak of the move.
What looked like a routine pullback quickly turned into a full leverage reset. Funding rates snapped back to neutral, signaling that excess bullish positioning had been purged. Market cap swung violently, echoing earlier $140 billion intraday shifts seen during previous volatility spikes.
LATEST: 📉 Bitcoin fell below $85,000 on Thursday to hit its lowest level in over a month as gold reversed its surge above $5,600, dropping nearly 10% in minutes and triggering broad selloffs across crypto and tech stocks. pic.twitter.com/oBu9ORaoEr
— CoinMarketCap (@CoinMarketCap) January 29, 2026
Panic And Accusations Swirl On Social Media
As price broke down, panic returned to crypto’s social feeds. Posts flooded X accusing major market maker Wintermute of manipulating the move by offloading hundreds of millions of dollars in BTC and ETH. No concrete on-chain proof has confirmed coordinated dumping, but the narrative gained traction as traders searched for a culprit behind the speed of the decline.
The emotional reaction mirrors previous drawdowns where sharp moves get personified into a single villain. In reality, the mechanics looked more like a classic liquidity vacuum. Once key support cracked, stop losses triggered, liquidations cascaded, and automated selling fed on itself.
Discussion intensified around the broader market structure as analysts shared breakdown charts and wave counts suggesting the correction may not be over yet.
Technical Structure Points To Deeper Wave C
From a technical perspective, several analysts argue Bitcoin is completing Wave 5 of Wave C within an expanded flat pattern that began in January 2025. If that primary scenario holds, sub-$80,000 becomes the minimum expectation rather than a worst case.
Common Fibonacci extensions for Wave C relative to Wave A project downside targets around $76.9K, $73.8K, $69.8K and $67.8K. While Wave C can theoretically stretch much further, historical tendencies cluster around the 1.23% to 1.61% extension zone.
In the shorter term, immediate support sits in the $82K–$81K range. A clean break there opens the door to a fast test of the mid-$70Ks. Bulls, however, are watching a different level: a reclaim of $90K–$93K as support would reset momentum and put a $95K breakout back on the table.
Macro Headwinds Add Fuel To The Selloff
Crypto did not fall in isolation. Macro pressure intensified at the same time.
The Federal Reserve held rates steady at 3.50–3.75% with no immediate cuts signaled. Odds of a U.S. government shutdown climbed toward 78%. The U.S. dollar strengthened, yields pushed higher, and safe-haven flows poured into gold, which ripped past $5,000 and at one point spiked above $5,600 before violently reversing nearly 10% within minutes.
That reversal in gold coincided with broad risk-off selling across crypto and tech stocks. Capital rotated out of speculative assets while exchange-traded funds tracking Bitcoin saw continued bleeding, logging about $19 million in outflows on the day and roughly $1.3 billion over the week.
Currency markets added another layer of pressure as yen strength tightened global financial conditions. Together, strong USD, rising yields, tariff fears and ETF outflows created a macro storm that hit Bitcoin right as leverage was stretched.
A Classic Leverage Flush Or Start Of A Bear Leg?
Despite the fear, some traders frame the move as a healthy reset inside a larger bull cycle. The arguement is simple: overleveraged longs got wiped, funding normalized, and the network itself shows no signs of stress.
On-chain activity remains solid. There is no evidence of miner capitulation or mass holder panic. Instead, the shakeout appears concentrated in derivatives markets where fast money overextended.
From this view, the drop resembles a “market flush” that clears excess speculation and rebuilds a base for the next leg higher. Supporters of this thesis point to slowing ETF outflows and early signs of rotation into other major assets like ETH and SOL as potential precursors to renewed Bitcoin demand.
They also note that if macro data softens later in the year, rate cuts could return to the conversation, restoring risk appetite. Under that scenario, a patient accumulation phase near fear-driven lows could look attractive in hindsight.
Bulls Accumulate While Bears Eye $70K
Sentiment has split cleanly into two camps.
Bears highlight the bear flag breakdown and expect continuation toward the mid-$70Ks or even high-$60Ks if macro conditions worsen. They argue that until $90K+ flips back to support, rallies are relief bounces inside a broader corrective wave.
Bulls counter that this is prime buying territory within a long-term uptrend. They aim for a six-figure Bitcoin once the $90K–$93K zone is reclaimed and converted into a launchpad. In their playbook, patience now sets up a powerful breakout later.
Both sides agree on one thing: volatility is back.
With more than $1 billion in liquidations scrubbing leverage from the system and options expiry adding extra turbulence, the market is undergoing a violent but potentially necessary reset. Whether that reset ends near $80K or extends toward $70K will likely depend on how macro pressures evolve and whether buyers step in decisively at the next support band.
For now, the market trades in fear, but the debate has shifted from panic to positioning. Traders are reassessing risk, watching key levels, and deciding whether this dip marks the start of something worse or the setup for the next major leg higher.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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