The initial excitement of the new year has largely faded as Bitcoin continues its downward trajectory, erasing much of the gains seen in the first week.
Bitcoin’s value has dropped by 2.4% within a single day and is currently trading around $89,881, based on CoinGecko statistics. Meanwhile, the overall cryptocurrency market capitalization, which reached $3.305 trillion yesterday, has decreased by 2.6%.
This decline in Bitcoin’s price triggered liquidations exceeding $477 million over the past 24 hours according to CoinGlass data. Traders who were optimistic and expected upward momentum are now facing losses; long positions represent more than 90% of these liquidations.
Other major cryptocurrencies like Ethereum and XRP have also fallen sharply—down 3.9% and 7.6%, respectively—while meme coins such as Pepe and Bonk, which nearly doubled during early January 2026, have declined by approximately 6.6% and 8%.
Illia Otychenko, Lead Analyst at CEX.IO, explained to Decrypt that Bitcoin slipping below $90,000 signals weakening momentum following an initial boost at the start of the year: “Initial investments combined with positive geopolitical news provided some support but weren’t sufficient to maintain a rally.”
Additional experts highlight multiple challenges impacting prices.
Wenny Cai, COO at SynFutures told Decrypt, “Despite a promising start to this year along with favorable structural developments… Bitcoin hasn’t been able to hold above $90K consistently due to several factors.”
Cai pointed out that global markets are experiencing risk-averse sentiment as investors await critical macroeconomic indicators like U.S employment reports; this cautious mood keeps appetite for risk subdued: “This cautiousness is evident in Bitcoin’s trading near low-$90K levels with occasional dips beneath $90K.”
The general investor confidence remains muted as well; users on Myriad—a prediction platform owned by Dastan, Decrypt’s parent company—assign only about a 24.5% probability that Bitcoin will reach a new all-time high before July.
Otychenko also noted that recent declines were exacerbated by renewed outflows from spot exchange-traded funds (ETFs), highlighting an exodus totaling $243 million from U.S.-based Bitcoin ETFs.
Cai agreed with this assessment but emphasized that while ETF flows represent long-term positives for crypto markets they can act as short-term obstacles: “Although structurally beneficial over time,” she said,“ETF withdrawals recently reduced immediate buying pressure.”
“Liquidity across crypto markets remains limited,” Otychenko added,”which leads to volatile price movements.” He expressed optimism about potential recovery if upcoming U.S jobs data triggers renewed buying interest in Bitcoin tomorrow.
Cai echoed concerns regarding liquidity constraints noting current conditions are “thinner compared to previous bull runs,” which tends to amplify downward price swings even when fundamental demand stays steady.”