Bitcoin (BTC) has plummeted below the critical $90,000 psychological support level, trading near $88,600 on Wednesday, January 21, 2026. The sharp correction marks a sixth consecutive day of losses, driven by a perfect storm of intensifying geopolitical tensions and surging U.S. Treasury yields. The sudden downturn triggered a massive deleveraging event, wiping out over $1.7 billion in leveraged positions across the broader crypto market in just 24 hours.

Global 'Risk-Off' Sentiment Crushes Crypto Prices

The Bitcoin price crash January 2026 is being fueled by a decisive shift in global market sentiment. Investors are fleeing risk assets in favor of safe havens as the 10-year U.S. Treasury yield surged to 4.27%, its highest level in months. This spike in yields has increased the opportunity cost of holding non-yielding assets like Bitcoin, draining liquidity from the cryptocurrency ecosystem.

Simultaneously, renewed geopolitical impact on Bitcoin has rattled markets. Reports of escalating trade tensions between the U.S. and European leadership, specifically regarding new tariff threats, have injected fear into global equities and digital assets alike. "The correlation between Bitcoin and global macro risks has tightened significantly," notes a lead analyst from CryptoQuant. "We are seeing a classic flight to safety, with capital rotating out of crypto and into government bonds and gold."

$1.7 Billion Liquidation Cascade

The break below the BTC support level 90k unleashed a cascade of forced selling. Data from Coinglass reveals that the crypto market liquidations today exceeded $1.7 billion, with long positions accounting for nearly 90% of the wiped-out funds. Over 400,000 traders saw their positions liquidated as the price sliced through the $90,000 floor, triggering stop-loss orders that accelerated the decline toward $88,600.

This leverage flush is reminiscent of the major corrections seen in late 2025, confirming that the market was heavily over-leveraged. The sheer scale of the sell-off suggests that institutional bulls who were defending the $90k line have capitulated, leaving the door open for further downside exploration.

ETF Outflows Signal Institutional Caution

Compounding the bearish momentum, U.S. spot Bitcoin ETFs have turned net negative. BlackRock’s IBIT alone recorded over $860 million in outflows on Tuesday, signaling that institutional investors are de-risking in response to the macroeconomic uncertainty. This reversal in flows is a critical dampener on price, removing the persistent bid that had supported Bitcoin throughout late 2025.

Bitcoin Price Prediction 2026: Where is the Bottom?

With Bitcoin risk-off sentiment dominating, technical analysts are now looking lower for support. The loss of the $90,000 zone has turned previous support into formidable resistance. Market watchers are eyeing the $80,000 to $82,000 range as the next major defense line for bulls.

"If the $88,000 level fails to hold on the weekly close, we could see a swift move toward $80,000," warns a trading note from QCP Capital. However, some contrarian analysts suggest that the magnitude of the crypto market news January 21 flush—clearing out billions in leverage—could set the stage for a relief bounce once the geopolitical headlines stabilize.

For now, caution remains the watchword. As Bitcoin sinks below $90k, the market enters a period of high volatility where macroeconomic data and government policy headlines will likely dictate the next major move.