Bitcoin Trades Near $88,000 as ETF Outflows Deepen and Gold Continues to Rally

Crypto markets continued to slump at the start of the week, with Bitcoin sliding further below the closely watched $90,000 level since Sunday, as heavy ETF outflows and rising geopolitical uncertainty put pressure on market sentiment.

Bitcoin (BTC) was trading just above $88,140 at press time, down about 0.5% over the past 24 hours and down 5% on the weekly timeframe. The drop comes despite Strategy revealing this morning that it has added 2,932 BTC to its balance sheet last week, purchased for $264.1 million at an average price of $90,061, bringing its total holdings to roughly 712,647 BTC.

Ethereum (ETH) also weakened, dropping as low as $2,787 on Sunday evening and trading flat over the past 24 hours around $2,936. ETH is down nearly 9% on the week and has been trading below $3,000 levels since Jan. 22.

Among the top-10 largest crypto assets, XRP outperformed today, up 2.5%, though it’s still down the same amount on the weekly timeframe.

Market sentiment has worsened to start the week, with the Crypto Fear & Greed Index sliding back into the “extreme fear” zone.

Corrective Phase

Analysts at Keyrock wrote in a Monday research note that Bitcoin’s failure to reclaim upside momentum has coincided with subdued demand for leveraged long exposure, raising doubts over the durability of the $90,000 support area.

“With BTC struggling to regain upside momentum, demand for leveraged long exposure has remained muted, raising questions around the durability of the $90,000 support zone,” Keyrock said.

In commentary for The Defiant, Farzam Ehsani, CEO of South African crypto exchange VALR, noted that the crypto market is “likely to remain in its current reactive, volatility-driven phase until inflation data prints provide easing signals and the overall macro backdrop allows for a market rally.”

Analysts at Singapore-based crypto firm Matrixport echoed that view, noting in an X post today that Bitcoin’s rejection at its 21-week moving average is a defining technical signal.

“As long as Bitcoin continues to trade below it, the market remains in a corrective phase. There will be opportunities for tactical rebounds — but this is not one of them,” wrote independent analyst Markus Thielen.

Big Movers and Liquidations

Looking at the top-100 assets by market cap, Justin Sun-backed RIVER surged 34.4%, making it the day’s top gainer, while Algorand (ALGO) rose 4.8%.

On the downside, Trump-linked World Liberty Financial (WLFI) was today’s biggest loser, dropping nearly 8%, followed by Rain (RAIN), down 3%.

As for crypto liquidations, roughly $750 million in leveraged positions were removed over the past 24 hours, with long positions accounting for $579 million, per data from CoinGlass. Ethereum led liquidations at $274.6 million, followed by Bitcoin at $206.7 million and Solana at $64.1 million.

ETFs and Macro Conditions

Crypto exchange-traded funds (ETFs) lost momentum last week. Bitcoin ETFs saw a total net outflow of $1.33 billion over the week ending Jan. 23, while Ethereum ETFs recorded just over $611 million in net outflows over the same period.

On the macro front, investors continue to favor traditional safe havens as geopolitical uncertainty increases. Gold surged to a fresh all-time high above $5,100 an ounce on Monday, extending its record-breaking rally.

At the same time, the U.S. Dollar Index dropped to 0.97, a four-month low, as reports surfaced that the U.S. Treasury and Federal Reserve have been in talks with Japanese authorities on possible measures to support the yen.

U.S. Treasury yields were little changed ahead of the Federal Reserve’s upcoming policy decision on Wednesday, Jan. 28. The 10-year yield dipped to 4.225%, the 2-year eased to 3.603%, and the 30-year fell to 4.816%, CNBC reports.

Political risk also moved back into focus. On Polymarket, the probability of a U.S. government shutdown by Jan. 31 surged to 82%.

The odds soared following reports that Democrats may block a $1.2 trillion funding package — that includes Department of Homeland Security (DHS) spending — after public outcry over the second fatal shooting of a U.S. citizen by immigration agents in Minneapolis.