Bitcoin drops to $ 88,000

Bitcoin BTC $87,394.94 Mezo Wrapped BTC -0.56% Market capitalization $51.19 million VOL. 24 hours $1.95 billion has dropped to around $ 87,800, having lost most of this year’s gains over the past week. Overnight, the flagship cryptocurrency fell by 1.5%, while ethereum ETH $2,909.11 Bridged Ether (StarkGate) 0.43% Market capitalization $66.68 million VOL. 24 hours $1.76 billion dropped to $ 2,930. The decline has been going on since mid-January, when the collapse to $ 89,000 on January 21 caused the liquidation of more than $ 1 billion worth of positions. Over the past 24 hours, liquidations of long positions have reached $ 224 million, including $ 68 million in bitcoin futures and $ 45 million in ether futures. The current price of bitcoin is almost 30% lower than the all-time high of $ 126,210 reached in October 2025.

The key factors behind the decline include political instability in Washington, the upcoming Federal Reserve meeting, and a new gold record that exceeded $ 5,000 per ounce. Funding for U.S. federal agencies expires on January 30, and if the Senate fails to pass a bill, a partial government shutdown is possible — the fourth in two years.

Gold rose from $ 4,600 in early January to more than $ 5,000, indicating increased demand for safe-haven assets amid geopolitical tensions and inflationary risks. Against this backdrop, bitcoin remains under pressure: investors are recording losses, and some players are selling assets on short rises. According to market estimates, the probability that gold will outperform bitcoin and the S&P 500 in 2026 is 45%, while for bitcoin this figure is 36%.

The Fed meeting is scheduled for January 28−29. After three cuts in 2025, the rate is currently at 3.5−3.75%. The new FOMC members, including Cleveland Fed President Beth Hammack, are expected to maintain a tough stance. She predicts inflation at around 3% by the end of 2026, which reduces the likelihood of further rate cuts in the near future.

Despite the general cooling of the crypto market, US spot bitcoin ETFs remain active: they manage $ 128 billion in assets and hold about 606,000 BTC. At the same time, trading volumes have declined over the past week, indicating a decline in institutional investor interest. The future dynamics of bitcoin will depend on the Fed’s decisions, the results of technology companies, and the political situation in the United States.