Crypto Market Tumbles: What’s Driving Today’s Sharp Downturn? – January 20, 2026
Crypto markets hit a sudden wall of selling pressure today, wiping out recent gains and sending traders scrambling for explanations.
Regulatory Headwinds Intensify
Fresh regulatory murmurs from multiple jurisdictions are spooking institutional money. A leaked draft proposal suggests major economies are coordinating on stricter capital requirements for digital asset holdings—a move that could force large-scale portfolio rebalancing.
Technical Breakdown Triggers Cascading Liquidations
Key support levels crumbled in early trading, triggering a cascade of automated sell-offs. Leveraged positions got obliterated as funding rates flipped negative across major perpetual swap markets. It’s a classic case of the market eating its own tail.
Macro Sentiment Sours Risk Appetite
Broader financial markets are showing fatigue, with traditional safe-haven assets seeing inflows. Crypto, still perceived as a high-beta risk-on trade, is taking the brunt of the rotation. Some analysts point to shifting treasury yield curves as the hidden culprit.
The Silver Lining Playbook
History suggests these sharp corrections often create prime entry points for disciplined investors. While the short-term pain is real, the underlying blockchain adoption narrative remains intact—infrastructure development hasn’t slowed, and on-chain activity metrics for decentralized networks show resilience.
Today’s slump feels brutal, but it’s just another volatile chapter in crypto’s march toward maturity. Remember, Wall Street usually panics right before it piles in. Stay sharp.
Crypto Winners & Losers
As of Tuesday morning (UTC), all top 10 coins per market capitalisation have seen price decreases over the past 24 hours.
dropped 1.6% since this time yesterday, changing hands at $91,020.
decreased by 2.5%, now trading at $3,117. This is the highest decrease in the category.
is next, with a 2.4% drop, followed by1.9% to the price of $0.3116.
The lowest fall in this period is seen by, given that it’s unchanged since yesterday, currently standing at $0.127.
Of the top 100 coins per market cap, 85 are down today.
The highest among these is, having decreased by 8.9% to the price of $0.02567.
is next on this list, having seen a drop of 7.2%, trading at $588.
On the other hand,is the only coin with a double-digit increase. It’s up 12.4% to $0.1251.
It’s followed by, which appreciated 5% to the price of $1.67.
The rest are up between 4.9% and 0.2% per coin.
Meanwhile,chief executive Brian Armstrong said he would be discussing the US crypto market structure in Davos this week.
“We’re going to continue to work on the market structure legislation, and meet with some of the bank CEOs to figure out how we can make this a win-win,” he said.
Just arrived in Davos for @WEF. Three main goals this week:
1) Talk to world leaders about economic freedom and how crypto can update their financial systems
2) Continue the push for market structure legislation
3) Keep pushing for tokenization to democratize access to capital… pic.twitter.com/knjuMZKRtb
In other news, a recent spike in activity on the ethereum network may be partly driven by address poisoning attacks, rather than organic user growth.
“Address poisoning has become disproportionately attractive for attackers,” security researcher Andrey Sergeenkov said, adding that scaling blockchain infrastructure without prioritising user safety risks distorts headline activity metrics.
Something extraordinary happened on @Ethereum last week.
On Friday, January 16, #Ethereum mainnet hit 2.9M #transactions in a single day (see Chart 1) — a new all-time high per @Etherscan. That activity was accompanied by a sharp jump in daily active addresses: ~1.3M (Chart 2),… pic.twitter.com/8EvKFymfWV
Market Spiralling Into Risk-Off Mode
Commenting on the conditions needed for a sustained recovery,analysts argued that “for a more durable rally to take hold, market structure will need to transition into a regime where maturation supply begins to outweigh long-term holder spending.”
Such a shift WOULD drive long-term holder (LTH) supply higher, which would signal renewed conviction and reduced sell-side pressure. Historically, analysts add, this configuration was last observed in August 2022–September 2023 and March 2024–July 2025. Both periods “preceded stronger and more sustained trend recoveries for Bitcoin.”
Moreover, according to the latest Bitfinex report, BTC is moving into a dense LTH supply zone between $93,000 and $110,000. Previous recovery attempts stalled there. LTHs remain net sellers, but the pace of distribution has slowed sharply, they write. Realised profits are down to around 12,800 BTC per week from cycle peaks above 100,000 BTC.
“This moderation, combined with supportive Q1 seasonality and stronger order-flow dynamics than prior rallies, improves the probability that BTC can absorb overhead supply,” Bitfinex says. “A sustained MOVE through this zone would require further easing in LTH sell pressure, paving the way for a more durable recovery and a potential re-test of all-time highs.”
$BTC is improving – but the real test starts here.
Price is pushing into the $93K–$110K supply zone.
Long-term holder selling is slowing fast, order Flow is stronger, and Q1 seasonality helps – but a clean breakout needs sellers to ease, with macro risks still in play… pic.twitter.com/v83LAl88KJ
Meanwhile, Petr Kozyakov, co-founder and CEO at payment infrastructure platform, commented that “Bitcoin is on the back foot, dropping 3 per cent after US President Donald TRUMP once again raised the stick of further tariffs, threatening NATO allies over control of Greenland.”
Kozyakov also noted a dive in Asian trading that “evaporated” most of BTC’s year’s gains. Even though sentiment turned positive at the start of the year, “the pullback in digital assets suggests that Optimism was on thin ice, underscored by multi-million-dollar liquidations across derivatives markets.”
The CEO concludes that “cryptocurrency markets are once again spiralling into risk-off mode as global stock markets also record losses. Meanwhile, gold and silver continue to shine brightly as investors seek out safer pastures.”
Levels & Events to Watch Next
At the time of writing on Tuesday morning, BTC was changing hands at $91,020. The coin has traded mostly sideways over the past 24 hours, between the intraday high of $93,301 and $93,176. It has dipped to $90,765 earlier this morning.
BTC has also turned red in the 7-day timeframe, dropping by 1%. It has traded in the $90,765–$97,538 range.
If the price fails to maintain this level, it could move below $90,000 and towards the $87,600 zone. Breaking above this current range would allow the coin to attempt to reclaim the $95,000 level.
At the same time, Ethereum was trading at $3,117. Much like BTC, ETH has moved in a tight range for the majority of the past 24 hours, between $3,210 and $3,231. It has decreased to the intraday low of $3,110 prior to the time of writing.
Over the past week, the price performance turned red, having decreased by 0.3%. It has been moving within the $3,110–$3,379 range in this timeframe.
An additional price drop may open doors for the $3,000 territory or even lead the coin to dip below it, leading to the $2,880 level. That said, a push upwards could see the coin reclaiming the $3,400 zone.
Ethereum (ETH)24h7d30d1yAll timeMeanwhile, after remaining largely unchanged over the weekend, the crypto market sentiment dropped over the past day.
The crypto fear and greed index fell from 49 seen over the past three days to 45 today, still staying within the neutral zone.
Caution, exasperated by the general uncertainty and concerns over the macroeconomic and geopolitical circumstances – specifically regarding Europe, China, and the US – is rising steadily among market participants.
ETFs Markets On Pause
Traditional markets were closed in the US on Monday for the federal holiday, Martin Luther King Jr. Day. Therefore, we don’t have fresh data on the US crypto spot exchange-traded funds (ETFs).
As reported yesterday, US BTC spot ETFs closed the Friday session with $394.68 million in negative flows. At the same time, the US ETH spot ETFs posted $4.64 million in inflows.
However, this gives us a chance to look into the performance of other major ETFs. For example, US XRP spot ETFs posted $1.12 million in inflows on Friday, with the total net inflow rising to $1.28 billion.
One of the five funds recorded positive flows, while there were no outflows on this day.took in $1.12 million.
Moreover, US SOL spot ETFs posted negative flows of $2.22 million, with the total standing at $863.8 million. Whilerecorded inflows of $425,030,andsaw outflows of $1.92 million and $725,810.
Meanwhile, US DOGE spot ETFs didn’t see any flows since 8 January, when they collectively took in $10.32 million. As of 16 January, the total flows stand at $6.58 million.
Quick FAQ
The crypto market posted another drop over the last 24 hours. Meanwhile, the US stock market was closed on Monday for a federal holiday. International stock markets – including the, the, the, the, and the– posted mixed performance on Monday.
The decrease may continue in the short term. It’s neither surprising nor unhealthy for the market. Zooming out, we see that the market has recently been trading sideways for the most part. Incoming signals, such as those coming from Davos, may affect the market, though how beneficial they may be remains to be seen.
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