Bitcoin crashes to $76,000, now sits 40 percent below its all-time high
Bitcoin has fallen to $76,000 following the recent weekend crash and now sits 40 percent below its all-time high of $126,000, which it reached in October 2025.
Particularly noteworthy is the fact that January marked a decline of nearly 11 percent, representing the fourth consecutive loss month—the longest negative streak since 2018. Unlike previous price crashes, there is no identifiable trigger this time, such as panic selling or systemic shocks. Instead, a gradual erosion characterizes market activity, driven by diminishing buying interest and declining liquidity. Bitcoin exchange-traded funds are experiencing continuous outflows, suggesting weakened conviction among institutional investors, many of whom now show losses on their positions.
DeFi or not, Bitcoin dictates the direction
The current collapse reveals a painful truth about the cryptocurrency market: despite thousands of alternative digital currencies and increasing institutional acceptance, markets in 2026 continue to move nearly in sync with Bitcoin. The notion of true diversification within the crypto sector proves to be an illusion. Sixteen different market indices representing different segments show losses between 15 and 19 percent for the current year.
Indices for decentralized finance protocols and smart-contract platforms are hit particularly hard, with losses of 20 to 25 percent. Even tokens from protocols that generate actual revenue and thus resemble traditional defensive sectors have fallen alongside Bitcoin. The token of lending protocol Aave lost 26 percent, while Hyperliquid represents a rare exception with a gain of 20 percent. Analysts attribute this lack of differentiation to the fact that Bitcoin consistently accounts for over 50 percent of the total market value of digital assets, and stablecoins serve as the preferred defensive allocation, preventing capital rotation into other cryptocurrencies.
Geopolitical tensions and forced liquidations
The weekend brought a dramatic escalation as Bitcoin crashed to $76,000. Since the October high, approximately $800 billion in market value has been destroyed. Within 24 hours, leveraged long positions worth $2.5 billion were forcibly liquidated, with nearly 200,000 traders losing their accounts. The immediate trigger was an escalation of military tensions between the USA and Iran, which abruptly froze risk appetite. Contrary to expectations, Bitcoin did not function as a safe haven but served as a liquidity source for distressed sales.
The situation was exacerbated by the nomination of Kevin Warsh to the Federal Reserve, which triggered a sharp rise in the US dollar. This dollar surge also pressured traditional stores of value: gold plummeted 9 percent on Friday to below $4,900, and silver collapsed 26 percent to $85.30. Thin weekend liquidity amplified the downward movement as automated sell orders triggered a chain reaction.
Michael Saylor’s Strategy in focus
Market data reveals a divided investor landscape. Retail investors holding less than 10 Bitcoin have been continuously selling their positions for over a month, capitulating in the face of a 35 percent decline from the all-time high. Simultaneously, large investors holding over 1,000 Bitcoin are quietly accumulating additional units and reaching levels last seen in late 2024.
Particular attention was drawn to the situation of Michael Saylor’s company Strategy, whose average entry price is around $76,037. When Bitcoin fell below that level, speculation arose about possible forced sales, which proved unfounded since no coins are pledged as collateral. Nevertheless, the situation impairs Saylor’s ability to raise cheap capital for further Bitcoin purchases, potentially depriving the market of an important buyer.
Contagion effects and historical parallels
The turbulence is not limited to the crypto market. US stock futures opened Sunday evening with losses, with the Nasdaq down 1 percent and the S&P 500 down 0.6 percent. The Fear & Greed Index for cryptocurrencies signals extreme fear. Stablecoins have established themselves as the preferred defensive position, representing a fundamental shift from traditional stock markets. While equity capital typically must remain invested, stablecoins enable rapid transitions from bullish to neutral positions.
This dynamic complicates the development of genuine defensive crypto sectors, as capital flows directly into dollar-pegged tokens during uncertainty rather than into revenue-generating protocols. Analysts argue that the industry must establish certain sectors, such as DeFi platforms, as crisis-resistant—similar to traditional markets—so they can actually attract capital during downturns.
Is the next crypto winter coming?
Parallels to the 2022 crypto winter are increasingly being discussed. At that time, a combination of excessive speculation and spectacular collapses led to an 80 percent decline in Bitcoin. A similar crash from the current cycle high would bring Bitcoin to around $25,000—a prospect that frightens many market participants but which analysts view as a potentially necessary correction.
The bottom of the last bear market formed shortly after the collapse of the FTX exchange. Whether similar events lie ahead in the current cycle remains to be seen. Institutional adoption by asset managers and regulatory progress distinguish this cycle from earlier phases, yet human behavior and boom-bust dynamics appear to be repeating. The coming weeks should reveal whether the market finds stabilization or whether further speculative excesses must be washed out before a sustainable recovery can begin.
