Crypto Takes a Hit as $1B ETF Outflows Drag Bitcoin Back to $89K
Crypto Market Down Today, January 23: Three Key Forces Behind the Sudden Sell-Off
The global cryptocurrency market is under renewed pressure on January 23, 2026, as investors react to a combination of geopolitical uncertainty, institutional withdrawals, and stalled regulatory progress in the United States. The sell-off has pushed total crypto market capitalization toward the $3.03 trillion mark, with more than 90 of the top 100 digital assets recording losses over the past 24 hours.
Market participants describe the move as a “risk-off reset” rather than a full-scale collapse, but the breadth of the decline has raised fresh concerns about short-term stability. From Bitcoin and Ethereum to major altcoins, selling pressure has intensified as macroeconomic and political signals converge.
Market Snapshot: Bitcoin and Altcoins Under Pressure
Live market data compiled by hokanews shows that the downturn is widespread and not limited to a single sector of the crypto market.
Bitcoin is trading near $89,100, down roughly 0.9% on the day and nearly 7% over the past week. More concerning for analysts is the sharp drop in activity. Daily trading volume has fallen by almost 29% to around $35.8 billion, suggesting reduced speculative interest and cautious positioning among short-term traders.
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Source: CoinMarketCap Data
Ethereum has fared worse in relative terms. The second-largest cryptocurrency is down about 1.4%, trading close to $2,975 after failing to hold above the psychologically important $3,000 level. On a weekly basis, Ether has declined more than 13%, reflecting both broader market weakness and continued uncertainty around network revenue and Layer-2 competition.
Major altcoins are following the same trend. Solana has slipped just over 1% to around $128, while XRP is down approximately 1.6% near $1.91. Smaller-cap assets have seen deeper losses, reinforcing the sense that investors are rotating away from risk.
Why Is the Crypto Market Down Today?
Analysts point to three primary drivers behind today’s decline, each reinforcing the others and amplifying downside momentum.
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1. Geopolitical Shockwaves From Davos
Volatility returned to global financial markets following comments made by U.S. President Donald Trump during his appearance at the World Economic Forum in Davos. Investors reacted sharply to renewed rhetoric surrounding Greenland, including references to tariffs and strategic pressure on European partners.
Although the administration later attempted to soften the message by referring to a potential “framework for future discussions,” the damage to market sentiment had already been done. Risk assets sold off across the board, while traditional safe havens benefited.
Gold prices surged to fresh record highs near $5,000 per ounce, signaling a clear flight to safety. Cryptocurrencies, which increasingly trade like high-beta macro assets during periods of uncertainty, moved in the opposite direction. For many investors, the episode underscored how sensitive digital assets remain to geopolitical headlines.
2. Massive ETF Outflows Signal Institutional Caution
Another major factor weighing on the market is the sudden reversal of institutional flows. Spot Bitcoin and Ethereum exchange-traded funds recorded combined outflows exceeding $1 billion earlier this week, marking one of the largest multi-day withdrawal periods since these products launched.
BlackRock’s flagship Bitcoin ETF experienced its largest single-day redemption on record, with more than $350 million leaving the fund. Other issuers reported similar, though smaller, outflows.
This trend suggests that institutional investors are locking in profits after last year’s rally, when Bitcoin briefly traded above $120,000. Rather than signaling panic, analysts view the move as strategic de-risking amid macro uncertainty and reduced confidence in near-term catalysts.
However, the impact on price is undeniable. ETFs have become a major source of liquidity and demand, and sustained outflows remove a critical support pillar from the market.
3. Regulatory Setbacks and the CLARITY Act Stalemate
Regulatory optimism has faded sharply following developments around the Digital Asset Market Clarity Act, commonly known as the CLARITY Act. The bill, which had been seen as a cornerstone of future U.S. crypto regulation, has encountered new obstacles in the Senate.
The situation worsened after Coinbase publicly withdrew its support for the revised draft earlier this month. The company cited concerns over provisions that could restrict stablecoin rewards and expand government access to financial data.
As a result, market expectations for a near-term regulatory breakthrough have collapsed. Prediction markets tracked by hokanews show the probability of the bill being signed into law in early 2026 falling from around 80% to near 40%.
For investors, this uncertainty reinforces a familiar theme: regulatory clarity remains elusive, and delays continue to weigh on long-term confidence.
Additional Pressure From Global Monetary Policy
Beyond U.S. politics and regulation, global macro factors are also playing a role. Attention is increasingly focused on Japan, where the Bank of Japan has signaled continued policy normalization after holding interest rates steady at 0.75%.
Historically, shifts in Japanese monetary policy have had outsized effects on global risk assets due to the so-called yen carry trade. When rates rise, leveraged positions funded in yen are often unwound, leading to selling pressure in equities, cryptocurrencies, and other speculative markets.
Past episodes of Bank of Japan tightening have coincided with Bitcoin drawdowns of 20% to 30%, making traders especially sensitive to any hint of further rate increases.
Technical Outlook: Where Does the Market Go From Here?
From a technical perspective, analysts describe the current phase as a high-risk consolidation zone. Bitcoin’s immediate support lies between $88,600 and $88,800, an area that has attracted buyers in recent sessions. A sustained break below $87,000 could open the door to a deeper correction toward the mid-$70,000 range.
On the upside, bulls face a difficult challenge. Many short-term holders have an average cost basis near $98,000, creating a strong resistance zone. Reclaiming and holding above that level would be necessary to restore bullish momentum.
Ethereum faces a similar struggle. Without a decisive move back above $3,200, analysts expect continued choppy trading and vulnerability to broader market weakness.
Expert Perspective: Correction, Not Collapse
Market strategists caution against interpreting today’s move as the start of a prolonged bear market. Instead, many compare the current structure to periods of consolidation seen in early 2022, when repeated failures to reclaim resistance led to months of sideways trading rather than an immediate crash.
According to analysts cited by hokanews, the key difference now is market maturity. Institutional participation is higher, derivatives markets are deeper, and on-chain data suggests long-term holders remain largely inactive.
That said, patience is likely required. Without a clear regulatory catalyst or a shift in macro conditions, upside momentum may remain limited in the near term.
Conclusion
The crypto market downturn on January 23 is the result of intersecting forces rather than a single trigger. Geopolitical uncertainty, large-scale ETF outflows, stalled regulation, and global monetary shifts have combined to pressure prices across the board.
While the broader trend remains intact for long-term believers, short-term traders face a challenging environment marked by reduced liquidity and heightened sensitivity to external events. Until confidence returns, risk management and caution are likely to dominate market behavior.
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