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Here’s Why Bitcoin And The Crypto Market Are Crashing This Weekend — Details
Bitcoin and the general cryptocurrency market have continued their struggles, as prices took a nosedive this weekend. On Friday, January 31, it seemed like the crypto market was gearing for another slow-action weekend as prices somewhat steadied after Thursday’s bloodbath.
However, the market has completely gone against the trend this weekend, with Bitcoin and the other large-cap digital assets falling by almost double digits on Saturday. Here is a look at the factors behind this steep decline and the immediate outlook for crypto prices.
Why Bitcoin And Crypto Prices Dropped This WeekendFollowing Bitcoin’s initial descent to $81,000, different reasons, ranging from geopolitical tensions to the FOMC’s decision to keep the interest rates unchanged, swirled around. However, the continuous decline of prices, even during the typically sluggish weekend, suggests that other factors are at play.
In a new post on the social media platform X, prominent financial markets commentator The Kobeissi Letter weighed in on the possible reasons behind the market-wide downturn in recent days. According to the report, a look at the crypto flow data would shed more light on this market conundrum.
According to The Kobeissi Letter, the recent price decline witnessed by the world’s largest cryptocurrency by market capitalization is completely a liquidity situation. As shown in the highlighted chart, Bitcoin has witnessed three well-defined liquidation waves, summing up to over $1.3 billion over the past day.
The financial markets commentator also mentioned that the crypto market liquidity has been choppy at best lately. However, sustained levels of extreme leverage in the Bitcoin market have caused the formation of “air pockets” in price.
The Kobeissi Letter added:
Couple this with herd-like sentiment, constantly shifting from extreme bullishness to extreme bearishness, and the swings become even more aggressive.
Unsurprisingly, the market-wide price correction saw the market hit with one of the largest liquidation events in crypto history. Market data shows that about $2.5 billion worth of levered longs have been liquidated in the digital asset market over the past 24 hours, the 10th-largest crypto liquidation event ever.
More notably, over $1 billion worth of levered long positions were forcibly closed within 5 minutes, as the Bitcoin price fell to around $76,000 on Saturday.
Total Crypto Market Cap Down By 7%As of this writing, the total cryptocurrency market capitalization stands at around $2.725 trillion, reflecting a nearly 7% dip in the past 24 hours.
Член правящей семьи ОАЭ купил половину криптокомпании Трампа — WSJ
Bitcoin Active Addresses Fall To 2020 Lows Following $83,000 Failure — What To Expect
The Bitcoin market has seen a horrific tale over the week, with the price recording a downturn of more than 12%. As the flagship cryptocurrency tests its $77,000 price support, data from recent on-chain analysis has been put out, which suggests that investors might have more concerns in the near-term.
Network Activity Collapses To 2020 Lows Despite Relatively Higher PricesIn a recent QuickTake post on the CryptoQuant platform, market analyst CryptoOnchain hypothesizes that the Bitcoin price currently stands very little chance of recuperating. On the contrary, the analyst implies that the flagship cryptocurrency could endure a sustained downturn, especially considering other on-chain conditions.
The market quant’s post revolves around the Bitcoin Active Addresses metric, which reveals how much network activity is ongoing within the Bitcoin market by measuring the amount of unique wallet addresses that are either sending or receiving BTC, over a period of time (in this case, over the past seven days).
According to CryptoOnchain, the active addresses count recently fell to 720,000, marking the lowest levels seen since April 2020. For context, the active addresses were as high as 1.126 million as of November 2024. Hence, the 36% contraction from the November 2024 peak to current readings reflects a significant reduction in on-chain activity.
From the chart shared by the analyst, it is apparent that network participation among retailers significantly declined in the latter half of 2025 and reached 2020 lows early in 2026. Notably, the current downtrend in network activity comes with a growing divergence. CryptoOnchain points out that the Bitcoin price still retains levels significantly higher than those seen in April 2020. But the network usage is still at that low level, reflecting a schism between network activity and price action.
The analyst concludes that this is a sign of insufficient support (i.e organic demand) from network users. In this case, losing the $83,000 support may have been a fatal blow for the Bitcoin price. The analyst explains that this worsened the risk of further downward movement, as Bitcoin’s growth was already without underlying network support.
For any recovery attempts to hold, and not end in “bull traps”, there has to be a reversal in the relative inactivity within the Bitcoin network currently unfolding. Better still, CryptoOnchain prescribes the “renewed influx of users on-chain” for a sustainable upside move to gain feasibility.
BTC Price OverviewAs of this writing, Bitcoin is worth about $78,743, with CoinMarketCap data reflecting a 6.39% loss over the past 24 hours.
