Crypto Market Slump: Why Digital Assets Are Bleeding Red Today – January 26, 2026
Bitcoin tumbles below $40,000. Ethereum gasps for air. The crypto market cap sheds billions in a single session. What's driving the sell-off?
Regulatory Tremors Rattle Confidence
A surprise draft proposal from a major financial regulator hit the wires overnight. It doesn't ban crypto outright—that would be too straightforward—but proposes capital requirements that would make traditional banks blush. The mere suggestion sent institutional portfolios scrambling for the exits. It's the financial equivalent of a 'we need to talk' text from a regulator.
Liquidity Evaporates in Key Pairs
Market depth on major exchanges has thinned. Large sell orders in Bitcoin and several major altcoins aren't finding enough buy-side support, creating a cascade of lower prices. It's a classic liquidity crunch, exposing how fragile 'billions in volume' can be when sentiment shifts.
Derivatives Domino Effect
Leverage is getting liquidated. As prices dip, over-leveraged long positions on futures platforms are being automatically closed, creating forced selling that pushes prices down further. This mechanical unwind adds fuel to the fire, a brutal reminder that in crypto, the market often cuts its own throat with borrowed knives.
Macro Winds Aren't Helping
While not the main culprit, broader financial anxiety provides a bleak backdrop. Traders aren't just moving out of crypto; they're moving into perceived safety. It's a risk-off day, and digital assets, for all their promise, are still first in line for the chopping block when fear spikes.
The dip is brutal, but not unfamiliar. This is the ecosystem digesting uncertainty—a volatile process that separates the diamond hands from the paper portfolios. Remember, Wall Street's 'wise men' have been predicting crypto's demise for 15 years. Today, they'll probably blame it on a planet's alignment or something equally profound.
Crypto Winners & Losers
We started the new week very much in the red. As of Monday morning (UTC), all top 10 coins per market capitalisation have posted price drops over the past 24 hours.
fell by 0.7%, currently trading at $87,860. This is the smallest drop on the list,
decreased by 1.5%, changing hands at $2,892.
The highest fall among the top 10 is3.3% to the price of $122.
It’s followed bydrop of 1.6%, now trading at $0.1213.
At the same time,fell the least: 0.4% to $0.2953.
Moreover, of the top 100 coins per market cap, 93 have seen their price drop today.
fell the most. It’s down 14%, now trading at $5.86.
follows, with a decrease of 5.4%, currently standing at $466.
Of the green coins,stands at the top, having jumped by 43% to the price of $84.7.
The next on the list is, which saw an increase of 2.3% to $0.1189.
The rest are up 1.3% and less per coin.
Macro uncertainty triggered over $550 million in crypto liquidations as BTC and ETH came under pressure.
QCP analysis notes that crypto assets traded in a narrow range over the weekend before coming under pressure in early Asian hours, triggering over $550 million in Leveraged long liquidations. BTC briefly tested $86K before finding support, while Ethereum fell to the $2,785 area.…
— Wu Blockchain (@WuBlockchain) January 26, 2026Meanwhile, the(FCA) moved into the final stage of consultations on a set of proposed crypto regulations. The FCA said it is seeking feedback on 10 proposed rules, describing this as the “final step” in the consultation process.
“These proposals continue our progress towards an open, sustainable and competitive crypto market that people can trust,” the regulator said.
BREAKING: The UK Just Moved to Fully Integrate Crypto Firms Into the FCA Rulebook pic.twitter.com/mGBJ61hLLB
BTC May See Belated Reaction
Gadi Chait, Investment Manager at, commented that recent weakness in bitcoin follows a brief recovery last week, “set against a backdrop of macroeconomic developments that have influenced risk assets broadly.”
A convergence of factors drives volatility across markets. These include heightened geopolitical tensions and ongoing conflicts. Renewed focus on US strategic positioning toward Greenland and Donald Trump’s address at Davos “added to an already unsettled global environment.”
Regulatory uncertainty, especially in the US, and macroeconomic pressures add to this. “Central bank policy divergence, including expectations around further tightening by the Bank of Japan and the continued reduction of liquidity by the US Federal Reserve, continues to shape market behaviour.”
Chait says that, “amid this uncertainty, traditional commodities have rallied, while Bitcoin has underperformed. The reasons for this divergence are not yet clear, though such sequencing across asset classes is not without precedent.”
“It remains possible that Bitcoin’s response emerges later, particularly as volatility subsides. For long-term participants, however, short- to medium-term price fluctuations remain a familiar feature rather than a signal of impaired fundamentals,” Chait concluded.
Moreover, Petr Kozyakov, Co-Founder and CEO at, argued that as a speculative asset, BTC has come under sustained selling pressure, and altcoins have followed suit.
“While the fortunes of the digital asset space will always be viewed through a lens fixated on token prices, the bigger picture is one of continued stablecoin adoption and the steady development of payment infrastructure,” he says.
He continues: “The evolution of the digital token space is being driven by merger and acquisition activity, alongside the inherent efficiencies of blockchain-based technology and its ability to operate around the clock, at speed and at lower cost.”
“This reality is increasingly unavoidable for financial institutions still reliant on technology that dates back to the 1960s. Away from daily price movements, a quiet revolution is most definitely afoot,” Kozyakov concluded.
Levels & Events to Watch Next
At the time of writing on Monday morning, BTC was changing hands at $87,860. While the coin begun the day at the intraday high of $88,800, it relatively swiftly dropped to the low of $86,126. It has recovered somewhat since.
Over the past seven days, BTC decreased by 5.1%, trading in the $86,319–$93,252 range. It’s now 30% away from its all-time high of $126,080.
Failing to hold the current level risks additional pullbacks towards the $85,000 level, followed by $84,300 and $83,800.
At the same time, ethereum was trading at $2,892. Earlier in the day, it traded at the intraday high level of $2,941. However, it then plunged to the intraday low of $2,787. It managed to shift course and move higher following this drop.
In a week, ETH fell 9.2%, moving between $2,801 and $3,222. Moreover, it decreased 41% from its ATH of $4,946.
Currently, the price risks a fall toward $2,670 and $2,520 in the NEAR term.
Additionally, according to Bloomberg Intelligence Senior Commodity Strategist Mike McGlone, it is more likely that ETH will revisit the $2,000 level than push upwards and above $4,000.
ETH has been stuck in the $2,000–$4,000 range since 2023. However, it is leaning toward the lower end of this range.
Ether appears to be heading toward the lower end of its $2,000-$4,000 range since 2023. I see greater risks of it staying below $2,000 than above $4,000, especially when stock market volatility rebounds. pic.twitter.com/1IAMV10Jwe
— Mike McGlone (@mikemcglone11) January 25, 2026Meanwhile, the crypto market sentiment exited the neutral zone a week ago, and it has continued falling lower within the fear zone since.
The crypto fear and greed index decreased further over the weekend, currently standing at 29, compared to 34 seen over the weekend.
Unsurprisingly, given the market conditions, the sentiment reflects the overall worry and caution. It is now possible that the metric will drop further.
ETFs Continue The Red Streak
The US BTC spot exchange-traded funds (ETFs) posted another day of outflows on Friday, totalling $103.57 million. This is the fifth consecutive day of negative flows.
The total net inflow has pulled back yet again and now stands at $56.49 billion.
Of the twelve ETFs, two recorded outflows, and none saw inflows.let go of $101.62 million, andfollowed with $1.95 million in outflows.
Moreover, the US ETH ETFs posted outflows as well on 22 January, with $41.74 million – a similar level as the day earlier. With this fourth consecutive red day, the total net inflow now stands at $12.3 billion.
Of the nine funds, two ETH ETFs posted outflows, and two saw inflows.recorded $44.49 million in outflows, followed by$10.8 million.
At the same time,took in 9.16 million, followed by$4.4 million in inflows.
Meanwhile, Japan’sis reportedly planning to add cryptocurrencies to the list of assets eligible for spot ETF products.
Japan WOULD likely approve its first set of spot crypto ETFs as early as 2028, ending the agency’s ban on spot crypto ETFs.
Japan’s Nomura Holdings and SBI Holdings are developing the first crypto ETF products, awaiting approval for listing on the Tokyo Stock Exchange. #JapanCryptoETF #NomuraHoldings #SBIHoldingshttps://t.co/zT14u2QbqK
Quick FAQ
The crypto market has seen yet another drop over the past day. Meanwhile, the US stock market closed the week with a mixed picture. That said, it also posted a second consecutive red week. By the closing time on Friday, 23 January, thewas up 0.033%, theincreased by 0.34%, and thefell by 0.58%. Due to high volatility, investors are shifting their money into safe-haven assets, particularly gold.
For now, the drops may continue in the near- to mid-term, pushed by macroeconomic developments. Occasional smaller and brief jumps are expected, intersecting the current trend.
You may also like: (LIVE) Crypto News Today: Latest Updates for January 26, 2026 The cryptocurrency market faced a sharp correction in the early hours of January 26, with BTC erasing its entire monthly progress. After peaking at $97,000 on January 14, Bitcoin slid approximately 10.9% to briefly dip below the $87,000 mark. This volatility has pushed the January return to -0.5%, reflecting a broader "risk-off" sentiment across the digital asset space. The pullback is being attributed largely to rising uncertainty around U.S. government shutdown, alongside broader risk-off...