Bitcoin Crashes to $84K as $650M Gets Liquidated in Crypto Bloodbath

$650 million vanished in a single day. That's how much got liquidated across crypto markets as Bitcoin crashed to $84,000, marking what could be its fourth consecutive monthly loss—a streak not seen even during crypto winter's brutal 80% collapse.

While gold, silver, and stocks bounced back from their session lows, crypto remained pinned near the bottom, raising uncomfortable questions about Bitcoin's supposed role as "digital gold."

When Safe Havens Aren't So Safe

Thursday's selloff started like many others—weak earnings, Iran tensions, government shutdown fears triggering broad risk-off sentiment. But here's what's telling: while traditional assets recovered, crypto stayed down.

"Everything from weak earnings results to worries around Iran and government shutdown are causing a broad-based selloff," said Joshua Lim, global co-head of markets at prime brokerage FalconX. "It's triggering a bigger unwind across consensus hedge fund and commodity trading advisors positions in metals and equities."

The difference? Gold climbed back up. Bitcoin didn't.

Ethereum dropped 6.29%, XRP fell 5%, and Solana tumbled 7% over 24 hours. The second-largest liquidation event of the month sent shockwaves through leveraged positions betting on higher prices.

The Contrarian Signal Hidden in the Chaos

But there's an interesting twist buried in the market data. Perpetual swap funding rates—a key gauge of trader sentiment—have flipped negative across major tokens including ETH, SOL, and XRP.

When funding turns negative, short sellers pay long holders to maintain their positions. Translation: most traders are betting on further declines. Historically, this kind of overwhelming bearish sentiment often precedes short-term bottoms as crowded short positions become vulnerable to sudden reversals.

It's the classic contrarian setup—when everyone's leaning one way, the market often goes the other.

The $80,000 Line in the Sand

U.S. spot bitcoin ETF buyers have an aggregate cost basis near $84,099—barely below current prices. But the real test lies at $80,000, where multiple support levels converge.

This level matches November 2025's low and aligns with the "True Market Mean Price"—a long-term fair value metric. Think of it as Bitcoin's gravitational center.

A sustained break below $80,000 would likely trigger a retest of April 2025 levels around $76,000, when Trump's tariff concerns sparked the last major selloff.

Four Months of Pain

January isn't over, but Bitcoin is already on track for its fourth consecutive monthly loss. To put this in perspective: even during 2022's crypto winter, Bitcoin didn't lose ground four months straight. You'd have to go back to 2019 to find such a prolonged decline.

Mark Connors, chief investment officer at Risk Dimensions, offers a sobering assessment: "The equity market has been all about the AI infra trade supported by deregulation and tax benefits. This has overshadowed BTC. I believe BTC will not take its next leg higher until we have a 'print' by the US."

Translation: Bitcoin needs the Federal Reserve to start printing money again.