Bitcoin’s brief triumph above the $100,000 milestone lasted less than 24 hours as the leading cryptocurrency plunged nearly 5%, dragging the broader digital asset market into negative territory. A wave of profit-taking, combined with macroeconomic pressures and rising U.S. Treasury yields, triggered one of the sharpest single-day corrections in recent weeks.
As of this report, Bitcoin is trading at $96,664**, having slipped below the psychologically significant six-figure threshold. The drop marks the largest two-week decline for BTC amid growing investor caution. Other major cryptocurrencies followed suit: **Ethereum (ETH)** tumbled 8.5% to $3,370, Solana (SOL)** fell over 8% to $199.26, and **Dogecoin (DOGE)** dropped 11% to $0.3481.
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Market-Wide Liquidations Surge Amid Sharp Correction
The sudden downturn triggered a cascade of leveraged position liquidations across crypto derivatives markets. According to data from CoinGlass, approximately $599 million** in futures contracts were liquidated within the past 24 hours. Of that total, more than **$540 million came from long (bullish) positions—highlighting how aggressively traders had bet on continued upside momentum after Bitcoin’s historic breakout.
This level of forced selling reflects the highly speculative nature of leveraged trading in crypto markets. When prices move rapidly against leveraged positions, exchanges automatically trigger stop-loss mechanisms to prevent further losses, which can accelerate downward momentum during sharp corrections.
Macroeconomic Data Sparks Risk-Off Sentiment
The sell-off began on the evening of January 7, coinciding with a pullback in U.S. equities after two consecutive days of gains. The reversal was driven by stronger-than-expected economic data that dampened market hopes for near-term interest rate cuts by the Federal Reserve.
Key indicators include:
- The ISM Services Index for December showed activity expanding beyond forecasts, with input prices climbing to a near two-year high.
- The U.S. Bureau of Labor Statistics released its Job Openings and Labor Turnover Survey (JOLTS) for November, revealing job openings surged to a six-month high—signaling a resilient labor market.
These reports suggest inflationary pressures may persist, reducing the likelihood of dovish monetary policy shifts in early 2025. As a result, U.S. Treasury yields spiked, increasing the opportunity cost of holding non-yielding assets like Bitcoin and tech-heavy equities.
Bob Wallden, Head of Trading at digital asset firm Abra, explained:
“The ISM data sparked a broad equity sell-off. Given the strong correlation between Bitcoin and the Nasdaq index, this pressure quickly spilled over into the crypto market.”
He added:
“After briefly breaking $100K, some investors took profits. This triggered stop-loss orders on long positions, amplifying the decline.”
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Geopolitical Uncertainty Adds to Market Jitters
Adding to the volatility, uncertainty surrounding former President Donald Trump’s stance on trade tariffs has introduced additional geopolitical risk into financial markets. While not directly tied to crypto fundamentals, such headlines contribute to overall investor nervousness—particularly in high-beta assets like Bitcoin and emerging blockchain tokens.
Wallden noted that fluctuations in the U.S. bond market have also intensified caution among crypto traders. With Treasury volatility rising, capital is shifting toward safer instruments, temporarily sidelining risk assets.
ETF Inflows Show Underlying Demand Remains Strong
Despite the sharp correction, institutional demand for Bitcoin remains robust. Just one day before the price drop, Bitcoin spot ETFs attracted $987 million in net inflows**—the largest single-day total since November 2024. The previous trading session also saw substantial demand, with inflows reaching **$908 million.
These figures underscore a growing trend: even amid short-term volatility, long-term investors continue to accumulate Bitcoin through regulated investment vehicles. This divergence between retail-driven futures markets and institutional ETF flows highlights a maturing ecosystem where different investor classes react differently to price swings.
Key Core Keywords:
- Bitcoin price drop
- Crypto liquidation
- Bitcoin spot ETF
- Market correction
- U.S. economic data
- Crypto volatility
- Leveraged trading
- Macroeconomic impact
FAQ: Understanding Today’s Market Move
Q: Why did Bitcoin fall so quickly after hitting $100,000?
A: The drop followed strong U.S. economic data that reduced expectations for Fed rate cuts. Higher Treasury yields made risk assets less attractive, while profit-taking and triggered stop-losses amplified the sell-off.
Q: How much money was lost in crypto liquidations?
A: Over **$599 million** in futures positions were liquidated in 24 hours, mostly from leveraged long positions that collapsed when Bitcoin failed to hold $100K.
Q: Are Bitcoin ETFs still seeing demand despite the crash?
A: Yes. Just before the correction, Bitcoin spot ETFs recorded $987 million in net inflows—the strongest daily performance since November 2024—indicating strong underlying institutional interest.
Q: Is this price drop a sign of a larger bear market?
A: Not necessarily. While short-term volatility is high, sustained ETF demand and macro adoption trends suggest this may be a healthy correction rather than the start of a prolonged downturn.
Q: How does U.S. economic data affect cryptocurrency prices?
A: Strong labor and services data reduce hopes for interest rate cuts, pushing up bond yields. This increases the cost of holding non-yielding assets like Bitcoin, often leading to sell-offs.
Q: What should investors do during sharp corrections like this?
A: Assess your risk tolerance and investment horizon. Short-term traders may face volatility risks, but long-term holders might view pullbacks as accumulation opportunities—especially with ETF inflows signaling confidence.
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Final Thoughts: Volatility Is Inevitable, But So Is Evolution
While the failure to sustain above $100,000 may disappoint some bulls, it's important to recognize that meaningful price discovery often involves retracements. The current correction is not an anomaly—it's part of a natural cycle driven by macro forces, technical positioning, and sentiment shifts.
What sets this cycle apart is the increasing influence of institutional infrastructure—particularly spot ETFs—that provides a floor for extreme downside moves. Even as leveraged traders get wiped out during volatile swings, long-term capital continues flowing into regulated products.
For observers and participants alike, this moment reinforces a core truth about digital assets: price volatility will persist, but so will innovation, adoption, and structural growth. Those who understand the difference between noise and narrative are best positioned to thrive in what comes next.