Bitcoin Tumbles to $84K: What Happened?
The cryptocurrency market experienced a sharp decline on Thursday as Bitcoin fell below $85,000, reaching a low of $84,250. This unexpected drop sent shockwaves through the market, leading to over $800 million in total liquidations within 24 hours, according to data from CoinGlass.
As gold also reversed from its recent peak of $5,500 per ounce, analysts pointed to macroeconomic pressures and geopolitical tensions as the primary drivers of this sudden downward trend. Other major cryptocurrencies, including Ethereum, XRP, and Solana, were also heavily affected, exacerbating the broader market sell-off.
What Drove This Cryptocurrency Crash?
The downturn began during Asian and early European trading sessions on January 29, with Bitcoin slipping below $88,000. Selling intensified as U.S. markets opened, pushing Bitcoin to a low near $84,000. This marks the cryptocurrency’s weakest level since December 2025 and signals ongoing fragility in market positioning.
One key factor contributing to this sell-off was the Federal Reserve’s recent announcement to hold interest rates steady, with no anticipated cuts until late 2026. Adding to this was the market’s reaction to rising geopolitical risks, such as escalated tensions between the United States and Iran.
In addition, a sudden reversal in gold prices contributed to the risk-off sentiment across markets. Gold, which had climbed to record highs above $5,500 earlier in the day, retreated to approximately $5,300. Silver followed a similar trend, further demonstrating the increased volatility across traditional and digital assets.
Bitcoin Liquidations: Key Insights
The volatility in Bitcoin extended to the derivatives market, where over $800 million in positions were liquidated within a single day. According to CoinGlass, Bitcoin alone accounted for $332 million of these liquidations, with $318 million being long positions. This aggressive unwinding of leveraged positions highlights the vulnerability of traders in volatile conditions.
Crypto trader Ted shared on social media platform X, “$BTC is now back into its strong support zone, with nearly $140 million in spot bids placed between the $80,000-$84,000 range.” Ted warned that a loss of this zone could push Bitcoin deeper into a bearish cycle, possibly revisiting April 2025 lows.
Impact on Altcoins and Investor Sentiment
The cryptocurrency crash didn’t spare altcoins. Ethereum dropped to roughly $2,800, XRP slid to $1.79, and Solana dipped below $120. These movements reflect a broader decline in investor sentiment, with many moving away from riskier digital assets toward safer, short-term cash positions.
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Macroeconomic and Geopolitical Pressures Intensify
The cryptocurrency sell-off aligns with a global shift toward risk aversion. Stock markets also saw declines, with Microsoft leading losses in the tech sector. Meanwhile, the Federal Reserve’s cautious stance on interest rates has fueled uncertainty, prompting investors to reevaluate their portfolios.
Geopolitical risks, including heightened tensions in the Middle East, have further strained markets. Analysts believe this mix of macroeconomic and geopolitical pressures may continue impacting both traditional and cryptocurrency markets in the near future.
Conclusion: Navigating Volatility
The recent Bitcoin crash and broader crypto market sell-off underline the inherent volatility of digital assets. As Bitcoin hovers near critical support levels, investors are looking for signs of recovery amidst a backdrop of economic uncertainty. While these market movements can be daunting, employing secure tools like hardware wallets and closely monitoring macroeconomic trends can help navigate these challenging times.
