Crypto markets started the new week on shaky footing, with Bitcoin slipping below the $75,000 level and major altcoins extending losses amid forced liquidations, thin liquidity, and fragile sentiment.
Total crypto market capitalization fell 2.8% to around $2.6 trillion, reflecting continued pressure after a volatile weekend.
Bitcoin drops below key support as selling accelerates
Bitcoin was trading near $75,501 at press time, down about 5.2% over the past 24 hours, after briefly dipping lower during the session. The move adds to a broader breakdown that has seen BTC lose multiple medium-term support levels.
Losses were steeper across altcoins. XRP fell 4.5% to $1.59, Chainlink slid 5.5% to $9.48, and Monero dropped sharply, down 12% to $405.
Liquidations surge as leverage remains high
Market stress intensified as trading activity picked up during the sell-off. Data from CoinGlass shows that liquidations over the past 24 hours surged 79% to $520 million, while open interest rose 4% to $108 billion.
That combination suggests traders continued to deploy leverage even as conditions deteriorated, leaving positions exposed once prices pushed lower. The result has been sharper, faster moves as forced liquidations cascade through the market.
Sentiment remains deeply negative. The Crypto Fear & Greed Index stood at 14, keeping the market firmly in extreme fear territory. Momentum indicators also remain weak, with the average relative strength index hovering near 35, signaling limited buying conviction.
Liquidity crunch amplifies volatility
Analysts say the latest drop has been driven more by market structure than by a single headline.
In a Jan. 31 post on X, researchers at The Kobeissi Letter described the move as “entirely a liquidity situation,” pointing to three liquidation waves totaling roughly $1.3 billion in just 12 hours.
In an environment where market depth has been inconsistent, heavy leverage has made price action more erratic. Orders are cleared quickly, creating sharp gaps and exaggerated swings as sentiment flips rapidly between optimism and fear.
Macro and geopolitical pressure add to risk-off mood
Pressure is also coming from outside crypto. Hawkish signals from the Federal Reserve and a firmer U.S. dollar have weighed on risk appetite, with Bitcoin trading increasingly like a high-beta tech asset rather than a defensive hedge.
Geopolitical concerns including renewed tensions around U.S.–Iran relations have added another layer of caution. Meanwhile, ongoing uncertainty around U.S. crypto regulation continues to hang over the market, as key legislation on market structure and stablecoins remains stalled.
Analysts divided on what comes next
Short-term conditions remain fragile as traders brace for further volatility ahead of major U.S. data releases later this month, including inflation and non-farm payrolls.
Some analysts warn that Bitcoin’s break below several support levels could mark the start of a deeper bearish phase. They point to stretched conditions below lower Bollinger Bands and weakening long-term indicators, suggesting BTC could test the mid-$70,000s or lower if selling pressure persists.
Others see room for a rebound. Oversold conditions resemble past setups that preceded short-term recoveries, and February has historically been a stronger month for Bitcoin. A move back above $80,000 could help stabilize sentiment if ETF outflows slow and macro conditions improve.
Researchers at XWIN Research Japan, a contributor to CryptoQuant, described the current pullback as more of a range-bound correction than the start of a full-scale bear market.
Their Apparent Demand indicator showed a net outflow of roughly 19,000 BTC in late January, pointing to soft new demand rather than panic-driven selling. They added that long-term holder behavior remains relatively stable compared with previous bear cycles.
Bottom line
Crypto prices today reflect a market still grappling with leverage, thin liquidity, and macro uncertainty. While downside risks remain in the near term, analysts remain split on whether the current sell-off represents final capitulation or just another volatile phase in an ongoing correction.
