The cryptocurrency market displayed signs of recovery on January 31, 2026, as Bitcoin (BTC) rebounded to around USD 83,975. This modest uptick comes after the asset experienced a significant decline earlier in the week, when it fell to lows near USD 81,000.
The recent volatility in the market was primarily driven by a broader selloff in risk assets, compounded by uncertainty regarding the leadership of the Federal Reserve and a staggering liquidation of long positions. On January 30 alone, over USD 1.8 billion in crypto derivatives were liquidated, reflecting the heightened anxiety among traders in response to ongoing macroeconomic pressures and geopolitical tensions.
While BTC has managed to find some support at its current price, the overall market sentiment remains cautious. Analysts have pointed out that the “Crypto Fear & Greed Index” has recently entered the “extreme fear” territory, signaling a pervasive sense of uncertainty among both retail and institutional investors. The global cryptocurrency market capitalization is currently around USD 3 trillion, struggling to regain the heights it reached in late 2025.
From a technical standpoint, Bitcoin”s price movement indicates it is still navigating through a challenging landscape. The digital asset is trading below several critical short-term moving averages. Market experts are particularly focused on the USD 80,000 psychological support level. A sustained drop below this threshold could potentially lead to further declines, possibly pushing prices toward the mid-USD 70,000 range.
Institutional participation continues to influence Bitcoin”s price dynamics significantly. Recent reports suggest that US-listed Bitcoin exchange-traded funds (ETFs) have seen net outflows, which has added downward pressure to BTC”s price. Nonetheless, some long-term holders view the current consolidation phase as a necessary reset after the record highs observed in October 2025.
On the regulatory front, the cryptocurrency industry is closely following the developments surrounding the “Clarity Act” in the United States. This legislation aims to establish a comprehensive framework for digital assets, which could provide much-needed stability in the long run. However, the immediate focus for market participants remains on the upcoming interest rate decisions from the Federal Reserve and the impact of the US dollar”s renewed strength.
In other market movements, Ethereum (ETH) is experiencing a consolidation phase, trading near the USD 2,800 level. Major altcoins such as Solana (SOL) and XRP are following similar trends, underscoring the high correlation among digital assets during times of macroeconomic uncertainty.
