BTC drops below $90,000 as triple pressures hit simultaneously

Bitcoin experienced a concentrated sell-off in the past 24 hours. According to the latest news, as of January 21, BTC is trading at $88,859.23, down 4.00% from the previous day. It previously touched a high of $97,860.60 and fell to a low of $87,814.93. The 24-hour trading volume reached $55.698 billion, with a market capitalization of approximately $1.78 trillion. This adjustment is not an isolated event; it is the result of multiple pressures occurring simultaneously.

Liquidity Tightening Becomes the Main Pressure

The global financial environment is rapidly cooling. The yield on Japan’s 30-year government bonds surged over 30 basis points to 3.91%, hitting a 27-year high, indicating that liquidity support from the Japanese market, a key source of traditional safe-haven funds, is shrinking. Meanwhile, the US 10-year Treasury yield also rose to 4.27%, a four-month high.

These two signals point to the same conclusion: global long-term liquidity is rapidly diminishing. In such an environment, demand for high-risk assets like Bitcoin naturally declines significantly, and market risk appetite drops sharply.

Geopolitical and Policy Uncertainty

Tensions have escalated with Trump’s threats of tariffs against European countries, further intensifying market risk aversion. Concerns are mounting that tariff policies may face Supreme Court rulings, and Europe might retaliate by selling off its holdings of US assets worth $12.6 trillion. These expectations have heightened worries about global liquidity tightening and accelerated the adjustment of risk assets. Market performance shows Bitcoin and Nasdaq futures declining in tandem, reflecting overall pressure on risk assets.

Market Structure Vulnerability Amplified

Deeper issues lie within the market structure itself. Bitcoin options market makers are in a negative Gamma position between $86,000 and $95,000. In a negative Gamma state, market makers often hedge risks by passively buying during price increases and selling during declines, which amplifies market swings and creates a “faster fall” scenario.

Meanwhile, over the past 24 hours, the entire network experienced $709 million in liquidations, including $234 million in Bitcoin long positions. This reflects a large-scale deleveraging of high-leverage buy orders, further intensifying the downward momentum. Additionally, today’s US Bitcoin ETF saw a net outflow of 2,886 BTC, indicating shaken confidence among institutional investors.

Long-term Support Remains

Despite short-term pressure, supporting factors have not disappeared. The US Congress is about to pass the “Digital Asset Market Transparency Act,” which will establish a tailored regulatory framework for the crypto market, aiding long-term orderly development. More notably, Delaware-based life insurance companies are collaborating with BlackRock to launch fixed indexed annuities with Bitcoin exposure, and the US Treasury announced that Bitcoin will be included in the government’s digital asset reserves. These developments reflect increasing recognition of Bitcoin at institutional and governmental levels.

Observation and Outlook

From a technical perspective, BTC has already risen 0.53% within 1 hour, indicating signs of a short-term rebound. However, the 7-day decline of 6.60% shows that downward pressure still exists. Future focus should be on two key areas: first, whether global liquidity will continue to tighten; second, whether geopolitical tensions will escalate further.

If liquidity conditions ease and institutional long-term allocations increase, Bitcoin may gradually stabilize. However, given the current high volatility and structural fragility, investors should prepare for more fluctuations.

Summary

This decline in BTC results from a confluence of macro liquidity tightening, geopolitical uncertainty, and market structural vulnerabilities. In the short term, the market needs to digest these negative factors. But in the long term, improved regulatory frameworks and increased institutional recognition provide structural support. The key is to monitor the trajectory of global liquidity and the evolution of political risks.