Gold Rises as Bitcoin Plunges Below $88,000 in Largest 2026 Sell-off
Global crypto markets slid sharply as Bitcoin fell below $88,000 during early Asian trading on Jan 21, 2026, wiping out gains made earlier in the year. Total crypto market capitalization lost about $200 billion over the weekend and was down ~4% on the day, with BTC shedding 10% over seven days. Ether fell roughly 7% to about $2,925, while most major altcoins dropped 3–7%; Canton (CC) was an exception with a 12% gain. Analysts attributed the sell-off to renewed geopolitical trade tensions — notably President Trump’s 10–25% tariff threats on European/NATO countries — combined with a sharp rise in long-dated Japanese government bond yields that signaled fading global liquidity. Traders shifted into safe havens: gold surged as risk-off sentiment dominated. Market strategists warned that total market cap was testing the lower bound of a sideways channel around $3.08 trillion; holding that support is critical to avoid a deeper bear market and prolonged crypto winter. Key names quoted include Andri Fauzan Adziima (Bitrue), Liz Thomas (SoFi), Ole Hansen (Saxo Bank) and Michaël van de Poppe.
Bearish
This event is bearish for crypto markets in both the short and medium term. Immediate sell pressure — BTC down 10% in seven days and total market cap falling toward the lower bound of a sideways channel (~$3.08T) — signals increased risk aversion. The trigger mix (geopolitical tariff threats and rising long-dated JGB yields) implies reduced global liquidity and broader risk-off flows, which historically depress risk assets including crypto and tech equities. Gold’s strength confirms a rotation into safe havens. Short-term impacts likely include higher volatility, stop-loss cascades, and potential further downside if support near $3.08T and BTC’s local support fail. Medium-term outlook depends on whether policymakers or markets stabilize bond yields and geopolitical tensions ease; absent such relief, capital may remain cautious and delay risk-on positioning, increasing the chance of an extended consolidation or deeper bear phase. Comparable episodes: 2018 and 2022 risk-off periods saw correlated crypto drawdowns when macro liquidity tightened and geopolitical/monetary uncertainty rose.