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Bitcoin crashed below $75,000 for the first time since April 2025, triggering nearly $2 billion in liquidations across cryptocurrency markets as traders grapple with the possibility of a prolonged crypto winter. The world’s largest cryptocurrency has now fallen approximately 40% from its 2025 peak, marking its longest losing streak since the devastating 2018 crash that followed the initial coin offering boom.
Massive Liquidations Rock Markets
The selloff accelerated over the weekend, with Bitcoin trading at $74,683 and Ethereum dropping below the critical $2,200 support level. Research analyst Riya Sehgal from Delta Exchange attributed the sharp correction to over $2 billion in positions being liquidated during low-liquidity weekend trading sessions. Unlike previous major drawdowns that had clear catalysts, this decline appears driven by fading demand and thinning liquidity rather than any single systemic shock.
The broader cryptocurrency market capitalization fell over 4% as major altcoins experienced sharp declines alongside Bitcoin and Ethereum. Market depth data from Kaiko shows Bitcoin’s ability to absorb large trades remains more than 30% below its October peak, highlighting the fragile state of current market conditions.
Institutional Outflows Signal Risk Reduction
A critical factor in Bitcoin’s decline has been the massive exodus from US spot Bitcoin exchange-traded funds, which recorded $1.6 billion in net outflows during January alone. This institutional risk reduction comes as macroeconomic headwinds intensify, particularly following President Trump’s nomination of Kevin Warsh as the next Federal Reserve chair. Markets interpreted Warsh’s appointment as hawkish, expecting tighter monetary policy that could pressure risk assets including cryptocurrencies.
Geopolitical tensions have further complicated the landscape, with reports of an explosion at Iran’s Bandar Abbas port sparking concerns over potential US-Iran escalation. These developments triggered a broader flight to safety, with the US dollar rallying at the expense of digital assets. The combination of macro uncertainty and geopolitical risks created a perfect storm for crypto market weakness.
Mining Disruptions Add Pressure
Bitcoin’s network faced additional stress from operational disruptions, as a massive US winter storm forced miners to curtail operations. The storm caused a 40% drop in network hashrate between January 23-25, with approximately 455 exahashes per second going offline and block production slowing to around 12 minutes. While miners earned millions from demand response programs by shutting down during peak electricity demand, the reduced network activity added to market uncertainty.
Institutional Paradox: Bear Market Admission Yet Bullish Outlook
Despite the harsh market conditions, institutional sentiment presents a fascinating contradiction. A recent survey by Coinbase Institutional and Glassnode revealed that while one in four institutions now acknowledge crypto has entered a bear market, an overwhelming 70% still consider Bitcoin undervalued at current levels. Most surveyed institutions reported maintaining or increasing their cryptocurrency exposure since October, suggesting long-term conviction despite short-term bearishness.
This institutional paradox highlights the complex dynamics at play in current markets, where immediate price action conflicts with fundamental value assessments.
Technical Outlook Points to Further Downside
From a technical perspective, Bitcoin remains trapped below key resistance levels at $80,000-$82,000, with analysts targeting potential downside moves toward $72,000-$70,000. Ethereum faces similar pressure below $2,500, risking a retest of the psychologically important $2,000 level. Market analysts expect choppy consolidation or further downside until macroeconomic stability returns and ETF inflows resume, suggesting the current defensive posture may persist in the near term.
Sources: Economic Times, Unlock Bc, Blocktempo, Mint, CryptoSlate
