Structural Break and Rapid Liquidations Deepen Bitcoin Losses Since January 28 Amid Liquidity and Risk Aversion Decline

New York | EcoPulse24

Bitcoin continues to trade under pronounced selling pressure since January 28, having lost a considerable share of its earlier gains and falling from levels near $89,000 to around $78,000. This trajectory reflects the market's shift from high volatility to accelerated downward pressure.

The recent movement is not the result of a single factor, but a convergence of several immediate drivers. Chief among them was the breach of key support levels, which had served as psychological and technical reference points for investors in the past quarter. This breach triggered stop-loss orders and automated selling. Simultaneously, margin-funded positions in the derivatives market were liquidated, amplifying the speed of the decline through a short-term forced selling cascade.

Additionally, a global decline in risk appetite has tightened liquidity flowing into highly volatile assets, as real yields remain relatively high and expectations for interest rate cuts are delayed. This has redirected some capital towards lower-risk instruments. Profit-taking after a previous rally also deepened the downturn, especially among short-term portfolios.

While short-term monthly performance previously showed tangible gains, the broader view reveals that prices remain below last year's levels, increasing market sensitivity to technical breaks and weakening the ability to absorb rapid shocks. The $78,000–$80,000 range has thus become a critical test area, with heightened volatility and reduced price stability.

EcoPulse24 Analysis:

Since January 28, Bitcoin has undergone a repricing primarily driven by structural and liquidity factors rather than a single news event. The structural break triggered a cascade of liquidations, and in the absence of fresh inflows to balance supply, the decline accelerated. Whether pressure persists or eases will depend on the market's ability to restore liquidity balance and establish a stable trading base, rather than relying on quick rebounds. In the short term, the market's path hinges on the current support zones and a shift in sentiment from risk management to rebuilding positions.