#Gate广场创作者新春激励 Bitcoin hits 90,000 USD setback, 240,000 liquidations, altcoins plummet—winter is back?

Has the recent crypto market situation made us break out in a sweat? After a brief rebound at the beginning of the month, Bitcoin has once again staged a sharp decline. The price dropped to a low of $87,946, with a maximum intraday decline of nearly 5%, erasing all gains since 2026 and directly triggering bearish sentiment across social platforms, filled with cries of liquidation.

This correction is driven by a triple squeeze of macro sentiment, capital flows, and market structure. So: should we lie flat, buy the dip, or sell the top now?

1. Bitcoin reverts to its original form
The failure to break through $90,000 on Bitcoin appears to be a technical pressure on the surface, but fundamentally it’s the result of large capital voting with their feet. As Georgii Verbitskii, founder of the custodial Web3 platform TYMIO, insightfully pointed out: “In the short term, Bitcoin’s weakness stems from a lack of interest from large institutions at current price levels.” This hits the core. Since the end of last year, the rebound has been mainly driven by leveraged technical repairs rather than genuine institutional participation. When the price hit this psychological key level of $90,000, institutions did not add positions; instead, they held back or even reduced holdings. The final straw crushing market confidence is the intensifying geopolitical storm. In mid-January, the Trump administration suddenly threw a tariff bomb, announcing that if relevant parties did not cooperate with the US’s sovereignty claims over Greenland, tariffs of up to 25% would be imposed on Germany, France, the UK, and others. This tough stance instantly shook global financial markets, with US stocks plunging, risk appetite sharply declining, and capital fleeing risk assets like cryptocurrencies.

What’s more notable is that under this geopolitical conflict, the “see-saw effect” between traditional safe-haven assets and cryptocurrencies has completely failed. Gold prices soared to a new all-time high, becoming a “safe harbor,” while Bitcoin was ruthlessly marginalized. The narrative of “digital gold” was shattered in the face of extreme uncertainty.

Verbitskii bluntly states that this is not a panic sell-off causing short-term volatility, but a market signal that Bitcoin is being re-priced as a “non-preferred safe-haven asset.”

2. A 66% drop is just the beginning? Market tolerance hits bottom
If Bitcoin’s decline is like a dull knife cutting, then the situation for altcoins is blood flowing in rivers. Ryan Li, co-founder of Surf, observed: “Even strong-performing altcoins are struggling, such as Avalanche, which has fallen about 66% since September last year, despite collaborations with institutions like JPMorgan and WisdomTree.” To note, AVAX, once an “institution darling,” has suffered such a heavy blow, and smaller altcoins lacking fundamental support have generally fallen over 80%, with many projects outright zeroing out, causing early-year FOMO investors to lose everything.

The core issue reflected here is that market tolerance for altcoins has plummeted to freezing point. Amid low macro sentiment and tightening funds, investors are no longer buying into “stories” and “concepts,” instead flocking to top assets like Bitcoin and Ethereum, or even pulling out of the crypto market altogether. On January 19 alone, Ethereum plunged 4.9%, and altcoins like Solana fell as much as 8.6%, with the entire market cap evaporating over $100 billion.

3. High leverage squeeze, market vulnerability exposed
The severity of this decline is partly due to macro and capital factors, but high leverage has played a significant role. CoinGlass data shows that on January 19, over 240,000 investors worldwide faced liquidations, with total liquidation amount soaring to $790 million, over 90% of which were long positions. The largest single liquidation occurred on the ETH-USDT trading pair, with a scale of tens of millions of dollars. After Bitcoin broke below $89,000, the total liquidation within 48 hours surged to $1.8 billion, with long positions accounting for 93%. This brutal squeeze is essentially the inevitable result of the crypto industry’s “high leverage dependency.” Currently, 10x and 50x leverage have become normal, with investors eager to amplify gains through leverage but ignoring its “double-edged sword” nature. During sharp price swings, high leverage accelerates losses and triggers forced liquidations. When Bitcoin broke key support levels, many preset stop-loss orders and algorithmic trades were triggered, causing the market to instantly fall into a liquidity vacuum. Long positions were forcibly liquidated en masse, further amplifying the price decline, creating a “downward spiral—liquidation—further decline” death cycle. Most investors who lost everything overnight did not lose because of market judgment but because of a lack of respect for risk.

4. Market outlook: Is this correction a short-term dip or the start of the 2026 crypto winter? Should we lie flat, buy the dip, or sell the top?
Here’s the conclusion: In the short term, market sentiment will remain uncertain, and increased volatility is the norm; but in the medium to long term, this correction is more like a “stress test” rather than a trend reversal signal. In the short term, geopolitical developments will be the key variable influencing market direction. As long as uncertainties like tariff threats and geopolitical conflicts persist, capital will continue flowing into traditional safe assets like gold, and the crypto rebound will face heavy selling pressure. Meanwhile, global regulatory tightening is also tightening market liquidity. The US has implemented Form 1099-DA requiring exchanges to report user trading gains, the UK mandates real-time reporting of user data, and Italy has increased crypto withholding tax rates to 33%. These policies make institutional investors more cautious.

However, in the medium to long term, the underlying logic of the market remains unchanged: US spot Bitcoin ETFs still see some capital inflow, with a net inflow of $1.2 billion in January, indicating that institutional funds are shifting from “riskless arbitrage” to “long-term trend speculation.” Bitcoin’s volatility is being structurally compressed, gradually transforming into a long-term asset on balance sheets, with its value proposition unfolding over a longer time horizon. Verbitskii also believes that once large funds re-enter, market sentiment could change rapidly.