275,000 Traders Liquidated as Bitcoin’s Four-Month Losing Streak Deepens

By the time the dust settled on January 29, 2026, 275,000 cryptocurrency traders had watched their positions evaporate. Gone. Liquidated in a cascade that accelerated through U.S. trading hours, swallowing $1.7 billion in leveraged bets across the market. Longs bore the brunt—93% of the pain—as Bitcoin punched through support levels that had held for months.

The flagship cryptocurrency shed over 6% that day, bottoming at $83,383.

What began as morning jitters above $88,000 unravelled into a four-hour freefall that erased approximately $85 billion from Bitcoin’s market capitalisation alone. The broader crypto ecosystem absorbed $200 billion in losses within 24 hours, dragging altcoins, DeFi tokens, and even crypto-adjacent equities down with it. MicroStrategy’s stock collapsed 10%. Coinbase dropped 6.5%. The contagion was swift and merciless.

The timing was brutal. Bitcoin’s descent accelerated precisely as U.S. equity markets opened, coinciding with a Nasdaq selloff triggered by Microsoft’s disappointing earnings report. The tech-heavy index slid 1.5%, amplifying a broader risk-off sentiment that had been building for weeks. Volatility surged past 40—a threshold that historically signals panic—while the Crypto Fear & Greed Index plummeted to 16, marking its lowest reading of 2026. Extreme fear had taken hold.

Yet the crash didn’t materialise from nowhere. Multiple pressure points had been building beneath the surface, and on January 29, they converged.

The Exodus Nobody Expected

Institutional money was fleeing. Bitcoin spot exchange-traded funds—the very instruments that had propelled much of the 2025 rally—hemorrhaged $1.137 billion in net redemptions during the five days ending January 26. The heaviest weekly exodus since early January 2026. Then came January 29 itself: $818 million in outflows in a single session, signalling something more profound than mere profit-taking. Institutional appetite had soured.

Capital was rotating, but not into riskier assets. Instead, investors stampeded toward traditional safe havens. Gold surged to $5,600 before pulling back to $5,400. Silver touched $120. These moves—dramatic even by precious metals standards—underscored a fundamental shift in sentiment. When gold outperforms Bitcoin by such margins, the message is clear: conviction in digital assets has fractured.

Meanwhile, macro uncertainty multiplied. U.S. announcements regarding rare earth tariffs injected fresh volatility into already jittery markets. Federal Reserve policy remained opaque, with speculation swirling around the next Chair appointment and the trajectory of interest rates. In such an environment, speculative assets like cryptocurrency become the first casualties. Money seeks certainty. Bitcoin offered none.

The Safety Net That Snapped

Technically, Bitcoin had been flashing warning signs for weeks. The cryptocurrency had been clinging to its 100-week simple moving average of $85,000—a support level that had held through previous corrections. When it finally broke below that threshold on January 29, the selling accelerated. Technical traders watching that level pulled bids. Algorithms triggered stop-losses. What had been a measured decline became a rout.

By January 30, Bitcoin hovered between $81,000 and $83,000, marking its fourth consecutive monthly loss. The longest losing streak since 2018, when the initial coin offering bubble burst and dragged the entire sector into an 18-month bear market. That historical parallel wasn’t lost on long-term observers. The 200-week moving average—sitting near $58,000—loomed as the next major support if the bleeding continued.

Leverage amplified every tick downward. With $13.5 billion in long positions at risk if Bitcoin hit $75,000, the liquidation cascade became self-perpetuating. Initial margin calls triggered sales, which pushed prices lower, which triggered more margin calls. Classic market mechanics, playing out at cryptocurrency speed. Within hours, $500 million in liquidations had ballooned to $1.7 billion. Bitcoin longs alone accounted for $768 million of that total.

Options markets painted an equally grim picture. Roughly 97% of call options were out-of-the-money, suggesting traders had been positioning for further downside rather than any swift recovery. Sentiment had turned decisively bearish.

The Mining Disruption

An often-overlooked factor compounded the pressure: Bitcoin’s mining network took a significant hit. Winter storms across key U.S. mining regions disrupted operations, causing the network hashrate to plummet 12% to 970 exahashes per second. The largest single drop since October 2021, when China’s mining ban forced a massive geographic redistribution of computing power.

Hashrate declines don’t directly affect Bitcoin’s price in the short term, but they signal stress within the network’s foundational infrastructure. Miners—who must sell Bitcoin to cover operational costs—face narrower margins when hashrate drops and difficulty adjustments lag. That selling pressure, however modest, adds to broader market weight during fragile periods.

What It Reveals

Beyond the numbers, the January 29 selloff exposed structural vulnerabilities that had been papered over during the previous rally. Retail traders, drawn by 2025’s gains, had piled into leveraged positions without adequate risk management. The 275,000 liquidated accounts tell that story. Many were likely under-capitalised, over-leveraged, or both—chasing returns in an asset class where volatility is not an aberration but the baseline condition.

Institutional participants, meanwhile, demonstrated their own fickleness. The speed of ETF outflows suggested that much of the so-called “smart money” was never committed for the long term. These were tactical allocations, easily reversed when broader market conditions deteriorated or when quarterly performance pressures mounted. The notion that institutional adoption would stabilise Bitcoin’s price action—a narrative promoted heavily throughout 2025—crumbled in less than a week.

Geopolitical tensions added another layer of uncertainty. Heated international developments, combined with domestic policy ambiguity, pushed investors toward assets perceived as stable and liquid. In that calculus, Bitcoin increasingly resembled speculation rather than a hedge. Gold’s outperformance drove the point home.

The Opportunist’s Dilemma

For those still standing, the question becomes whether this represents capitulation or merely another leg down. Historically, Bitcoin’s longest losing streaks have preceded significant recoveries. The 2018 bear market eventually bottomed, giving way to the 2020-2021 bull run. The 2022 collapse found a floor near $15,500 before the 2023 rally began. Patterns suggest that extreme fear—the kind reflected in a Fear & Greed Index reading of 16—often marks turning points.

Yet history also shows that catching falling knives can be expensive. If Bitcoin fails to hold current levels, analysts have identified potential targets as low as $74,000 or even $52,000, where longer-term moving averages and historical support zones converge. A sustained break below $80,000 could trigger another wave of liquidations, this time targeting the $13.5 billion in longs still at risk.

Diversification strategies gained renewed attention in the crash’s aftermath. Some traders rotated into stablecoins, preserving capital while maintaining exposure to crypto infrastructure. Others shifted toward traditional hedges—precious metals, short-dated government bonds, cash. The playbook that worked during 2025’s ascent had clearly stopped working.

Position sizing emerged as the critical lesson. Those who survived with portfolios intact were typically those who had avoided excessive leverage, maintained stop-losses, and kept cash reserves for precisely these moments. The traders who got liquidated on January 29 were, by definition, those who had done the opposite.

What Comes Next

As Bitcoin stabilises in the low-$80,000 range, the path forward remains uncertain. A resumption of ETF inflows could provide the buying pressure needed to reclaim lost ground. Clearer signals from the Federal Reserve regarding monetary policy might restore risk appetite across asset classes. A sustained move above $95,000 would likely trigger short-covering and renewed bullish momentum.

But those are conditional scenarios. What’s clear is that the January selloff broke the narrative of inevitable upward progression. Bitcoin’s fourth consecutive monthly decline—extending a losing streak not seen in eight years—suggests structural headwinds rather than temporary volatility. Whether this marks the end of a correction or the beginning of a prolonged bear market won’t be known for months.

For the 275,000 traders liquidated on January 29, the answer hardly matters now. Their positions are gone, their lessons learned the hard way. For those still holding, or those considering entry points, the crash serves as a reminder: In cryptocurrency markets, conviction without capital management is indistinguishable from recklessness.

The $200 billion question is whether enough buyers remain to absorb the next wave of selling—or whether the exodus has only just begun.