Bitcoin had a brutal weekend, briefly slipping below $75,000 before clawing back above $78,000 Monday morning. Even with the bounce, January closed down more than 10%, marking four straight red months and the worst January performance since 2022. Over $5 billion in crypto liquidations hit the market in just four days, the largest wave since October’s washout.
Liquidity Is Calling the Shots
Analysts say the bigger story is not crypto specific, but macro driven. Traders are watching how Kevin Warsh’s potential path to the Fed chair could reshape expectations around liquidity, rate cuts, and balance sheet policy. Several researchers noted bitcoin is now trading below key on-chain cost basis levels, including short-term holder averages, increasing the risk of further capitulation if ETF flows do not stabilize.
Support Levels Everyone Is Watching
Spot demand has appeared around the $75,000 to $76,000 zone, but $73,000 is seen as the critical line in the sand. One analyst warned that a clean break below that level could open the door to a move under $60,000 by the end of February. While some argue the drawdown is mild by historical bitcoin standards, others say sentiment is starting to resemble prior cycle stress events, especially for leveraged or treasury heavy players beyond Strategy, which has more time and flexibility than most.