The cryptocurrency market continued its downward trend for the third consecutive day, with major digital assets posting notable declines amid growing investor caution.
Bitcoin (BTC) fell 3% over the past 24 hours to $91,300, while Ethereum (ETH) dropped 3.4% to $3,170. Other cryptocurrencies also saw losses, with XRP declining 2.2% and Solana (SOL) tumbling 6%. The total crypto market capitalization shrank by 4.4% to $3.38 trillion.
The market turbulence triggered widespread liquidations affecting 130,000 traders, with total losses reaching $404 million. Bitcoin accounted for $106 million in liquidations, followed by Ethereum at $84 million. The largest single liquidation was a $12 million ETHUSDT position on Binance.
Market experts point to several factors driving the sell-off, including macroeconomic data from the US. The JOLTS report showed higher-than-expected job openings, raising concerns about potential Federal Reserve policy tightening.
"Bitcoin could be in for a choppy, wide, range-bound ride," said Bill Barhydt, CEO of Abra. He expects Quantitative Easing to begin by March to reduce long-term US interest rates, which could trigger a strong rally in risk assets.
Adding to market pressure, Bitcoin spot ETFs recorded their largest withdrawals of approximately $583 million on January 8, the highest outflow since December 19, 2024.
The US Department of Justice's clearance to liquidate $6.5 billion worth of Bitcoin seized from the Silk Road marketplace has also impacted investor sentiment. The DOJ cited Bitcoin's price volatility as a key factor in their decision to sell.
The current market decline reflects cryptocurrency's strong correlation with traditional equity markets, particularly tech stocks, which have also experienced recent setbacks. This relationship highlights the growing integration of digital assets with broader financial markets.