Why Is Crypto Down Today? Profit-Taking and ETF Outflows Pressure Market

Source: CoinEdition Original Title: Why Is Crypto Down Today? Profit-Taking and ETF Outflows Pressure Market Original Link:

• Crypto prices slipped as investors locked in gains after an early-January rally.
• Bitcoin has dipped under $90,000, triggering liquidations and ETF outflows.
• Easing rate expectations and upcoming policy events could support prices ahead.

Cryptocurrency prices fell on Thursday as investors booked profits after a strong early-January rally. Bitcoin has now slipped below $90,000, pulling the broader crypto market lower. Selling followed repeated failures near key price levels, ETF outflows, and a cautious macro backdrop.

Crypto Market Pulls Back After Early-January Rally

The total market capitalization declined by 2.6%, hovering near $3.16 trillion, as traders reduced exposure following recent gains. Bitcoin led the move lower after failing for a third time in five weeks to break above the $94,000 to $94,500 range.

The rejection triggered selling, pushing Bitcoin down toward the $89,989 area. Bitcoin has now seen a 2% loss over 24 hours, while still holding a weekly gain of more than 2.7%.

The pullback followed a rally of more than 8% between Jan. 1 and Jan. 7, when Bitcoin briefly surged past $94,400. Market participants said the rapid advance left prices vulnerable to profit-taking.

Altcoins Decline as Risk Appetite Cools

Altcoins posted steeper losses as investors rotated away from higher-risk assets. Ethereum, XRP, Solana, and Dogecoin underperformed Bitcoin during the session. XRP fell 6.2% over 24 hours, sliding from $2.28 to about $2.10 after repeated failures near the $2.28 level.

Dogecoin declined about 4% on the day but remained up more than 18.2% over the past week, while Ethereum slipped around 3% over 24 hours and held a seven-day gain of roughly 4.5%. Despite the declines, market participants said the broader altcoin structure does not yet point to a full trend reversal.

Liquidations, ETF Outflows Add Pressure

Derivatives markets amplified the downside move. About $465 million in crypto futures positions were liquidated over the past 24 hours, with long positions accounting for more than half. Notably, 137,886 traders were liquidated, with the largest single liquidation order happening on Hyperliquid, valued at $3.63 million.

Specifically, Bitcoin saw $56.7 million in liquidations, with long positions accounting for $47.6 million of the total value. The liquidations reflected heavy positioning after last week’s rally.

Elsewhere, spot Bitcoin ETFs also weighed on sentiment. U.S.-listed products recorded net outflows of roughly $486.1 million in a single day, extending losses into a second straight session for the first time this year.

Additional supply came from miners. Riot Platforms, a U.S.-based miner, reportedly sold more than 1,800 BTC worth about $161.6 million to meet operational needs. Smaller Bitcoin sales tied to a U.S. Department of Justice case also added to the short-term supply.

Macro Signals and January Effect

The decline came as traditional markets sent mixed signals. U.S. Treasury yields fell, with the 10-year yield dropping to around 4.14% after weak economic data reinforced expectations for Federal Reserve rate cuts later in 2026.

ADP data released Wednesday showed private-sector payrolls rose by 41,000 in December, below a Bloomberg median estimate of 50,000.

Some rate markets briefly increased bets that the Fed could deliver at least two quarter-point cuts by year-end. Analysts said expectations of easier policy tend to support risk assets, though near-term volatility remains.

What Comes Next and Upcoming Positive Events

Analysts say the current crypto pullback is consolidation rather than a breakdown, as long as Bitcoin holds the $88,000–$90,000 zone. Ali Martinez said that a clear trend may only emerge with a daily close below $88,000 or above $94,000.

Upcoming events could support a rebound. The U.S. December jobs report on Jan. 9, 2026, may push the unemployment rate slightly lower. Softer data could strengthen expectations of Federal Reserve rate cuts, historically favorable for crypto.

Additionally, stability in equity markets and ETF inflows may also support prices.

Notably, Matt Hougan, Chief Investment Officer at Bitwise, said avoiding large-scale liquidation events like the October 2025 crash, regulatory clarity, and stable markets are key to confidence. He highlighted the Clarity Act as a potential catalyst for institutional participation and noted Bitcoin’s lower volatility suggests long-term flows may drive the next phase of the market.