Digital assets have surrendered every gain made in 2026 after Bitcoin briefly slid below $88,000 on Wednesday, wiping more than $200 billion off total market value in 24 hours.
At a Glance
- Bitcoin tumbled 10% in seven days, trading near $88,000 early Wednesday
- Ether dropped back under $3,000, falling 7% to $2,925
- Total crypto market cap shed 4% and sits at $3.08 trillion
- Why it matters: A fresh round of U.S. tariff threats and a Japanese bond rout are draining liquidity from risk assets, putting the market on the edge of a prolonged bear phase.
The overnight plunge returned most major tokens to December lows. BTC now hovers at the lower bound of a two-month range, while the broader market tests critical support that, if broken, could usher in a deeper crypto winter.
Trade War Spurs Risk-Off Mood
President Trump’s renewed pledge to hit European and NATO countries with 10-25% tariffs-tied to the Greenland dispute-sparked the initial risk-off move, analysts said. Markets had a long weekend to digest the news; U.S. trading reopened Tuesday after Monday’s holiday, amplifying volatility.
“The cryptocurrency market crashed on January 21, primarily due to broad risk-off sentiment from President Trump’s renewed 10-25% tariff threats on European/NATO countries over the Greenland dispute,” said Andri Fauzan Adziima, research lead at Bitrue.
Japanese Bond Rout Adds Pressure
While headlines focus on trade tensions, a parallel selloff in Japanese government bonds is compounding the pain. Yields on long-dated JGBs have surged, eroding one of the world’s most reliable liquidity backstops.
“Much of today’s market upheaval stems from Japan,” said Liz Thomas, head of investment strategy at SoFi.
Ole Hansen, head of commodity strategy at Saxo Bank, warned that the relentless climb in JGB yields signals waning global liquidity, a development that “extends well beyond Tokyo.” Risk assets like crypto and tech stocks typically absorb the first shocks, while gold and commodities attract flight-to-quality bids.
MF Fund founder Michaël van de Poppe noted that gold’s vertical rally coincides with “max panic” across markets. A breakdown in the Bitcoin-to-gold ratio has reached levels last seen during the 2018 and 2022 bottoms, he added.
Altcoins Swept Lower
Ether’s slide below $3,000 led large-cap losses, but few tokens escaped the rout. Key moves include:
- Binance Coin, Monero, Hyperliquid all posting heavy declines
- Most mid-cap altcoins down 3-4%
- Canton (CC) the notable outlier, jumping 12%
Total crypto capitalization now sits at $3.08 trillion, precisely at the lower trend line of its recent sideways channel. Losing this level, traders said, would increase the odds of a drawn-out bear cycle.
Market Snapshot
| Asset | 7-Day Change | Key Price Level |
|---|---|---|
| Bitcoin (BTC) | -10% | $88,000 |
| Ether (ETH) | -7% | $2,925 |
| Total Market Cap | -4% | $3.08 trillion |
Data at time of writing; prices rounded.
Key Takeaways
- Trump tariff headlines and a Japanese bond selloff have combined to drain global liquidity
- Bitcoin’s 10% weekly drop leaves it clinging to range support
- The broader market is one technical breakdown away from a potential crypto winter
- Until macro forces stabilize, expect continued pressure on risk assets
