Crypto Economy Slides: Bitcoin Nears $90K Amid Intense Sell-Off

Crypto Economy Slides: Bitcoin Nears $90K Amid Intense Sell-Off

The cryptocurrency market faced significant turbulence on Thursday, with Bitcoin (BTC), the leading digital asset, dropping to an intraday low of $91,215. This marks a decline exceeding 3% against the U.S. dollar in just 24 hours. The broader crypto economy saw its collective valuation contract by 2.5%, now standing at $3.22 trillion.

Bitcoin Battles to Maintain Stability
Over the past month, the crypto market has shed $420 billion in value, with Bitcoin nearing the critical $90,000 mark. As of January 9, 2025, Bitcoin's price has fallen 3% in the past day and 5.5% over the week.

Among major cryptocurrencies, Solana (SOL) recorded the steepest drop, plunging 6.8%. Despite the downturn, Tether (USDT) has emerged as a key trading tool, with a staggering $122 billion in 24-hour volume as traders shift from Bitcoin and altcoins into stable assets. Bitcoin itself saw $61.42 billion in trading volume, much of it under selling pressure.

South Korean Premium Adds Complexity
Bitcoin’s global average price hovered around $91,877, but in South Korea, it traded at a premium, reaching $95,301 on the Upbit exchange. This divergence reflects regional market dynamics, with Cryptoquant analytics reporting a negative $23.98 Coinbase Premium Gap.

The sell-off aligns with news that the U.S. Justice Department is set to liquidate over $6 billion in Bitcoin holdings. Meanwhile, onchain analytics indicate increasing pressure on short-term holders. Analyst Maartunn highlighted that 36,400 BTC have been moved from short-term holders to exchanges, with the Spent Output Profit Ratio (SOPR) dipping below 1, signifying coins being sold at a loss.

Derivatives Market Liquidations Surge
By Thursday evening, Bitcoin was trading at $92,671 per unit. The derivatives market also faced upheaval, with $372.44 million in liquidations over the past 24 hours. Long positions bore the brunt, accounting for $264.50 million of the liquidated positions, including $63 million in Bitcoin longs.

Looking Ahead
The current market conditions highlight growing uncertainties within the crypto economy. With increasing sell-offs, regional price variations, and significant liquidation events, investors and traders remain cautious as Bitcoin teeters near the $90K threshold. Whether the market stabilizes or faces further turbulence will largely depend on macroeconomic factors and regulatory developments in the weeks to come.