Market Turmoil: Bitcoin and Altcoins Suffer Heavy Losses
Since the launch of Bitcoin spot ETFs, volatility has rocked the crypto market. On January 23 at 18:00 UTC, Bitcoin abruptly crashed below $39,000, dragging major altcoins down with it:
- Ethereum: ~5% 24-hour drop
- Cardano (ADA): ~6% decline
- Dogecoin: 6.5% plunge
Derivatives traders faced even steeper losses. CoinGlass data revealed:
- 13,000 traders liquidated within 24 hours
Total liquidations: $337 million
- Long positions: $298 million
- Short positions: $38.6 million
Post-ETF Approval: A 20% Bitcoin Correction
The market downturn accelerated after Bitcoin spot ETF approvals. Key data points:
- Bitcoin peaked at $48,969 on January 11
- Dropped 20%+ to below $39,000 by January 23
- $495 billion in crypto market cap evaporated
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Shifting Market Sentiment
Alternative.me's Fear & Greed Index reflects cooling investor enthusiasm:
- Dropped from "Greed" to "Neutral" (50)
- Rising volatility signals short-term panic selling
OKX Research Analyst Zhao Wei explains:
"Profit-taking after the ETF approval catalyzed this correction. Market makers are rebalancing positions."
Analysts Warn of Further Downside
Despite Bitcoin's long-term bullish trajectory, analysts caution:
- Fairlead Strategies' Katie Stockton: Potential drop to $36,000
- Wolfe Research's Rob Ginsburg: Q1 2024 could see extended weakness
SEC Hack Investigation: What We Know
The SEC revealed on January 22:
- A hacker accessed an employee’s phone via SIM-swapping
- Fake ETF approval posts appeared on SEC’s X account
- No evidence of broader system breaches
- Multi-factor authentication (MFA) was disabled since July 2023, now reinstated
FAQs: Navigating the Crypto Crash
Q: Should I buy Bitcoin now during the dip?
A: While prices are discounted, monitor key support levels ($36K–$38K) and ETF inflow data before entering.
Q: How do ETF flows impact Bitcoin’s price?
A: Sustained institutional buying through ETFs could stabilize prices, but short-term volatility persists as markets digest supply/demand shifts.
Q: Are altcoins riskier than Bitcoin in this market?
A: Yes—smaller-cap coins typically exhibit higher beta (amplified gains/losses) relative to Bitcoin during corrections.
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Key Takeaways
- Bitcoin’s post-ETF selloff reflects classic "buy the rumor, sell the news" behavior
- Derivatives liquidations exacerbated the drop, particularly for leveraged longs
- Market structure remains intact—watch for accumulation near $38K support
- Regulatory clarity (SEC hacks aside) could eventually bolster confidence
Note: This analysis excludes financial advice—conduct independent research before trading.