Bitcoin experienced significant volatility on the night of 31/1, showing signs of a rapid decline after a week of stable trading around the $86,000 mark.
In the early hours of today, the critical $80,000 support level was easily breached. The market's largest cryptocurrency briefly fell to nearly $77,600, losing over 7,5% compared to the previous day.
Bitcoin has corrected by approximately 39% from its record high of over $126,000, set in early October 2025. The current market price is only 4% above its one-year low.
A wave of declines swept over many other cryptocurrencies. Ether fell by over 13% from yesterday, dropping below $2,330. XRP, ADA, and ZEC each lost more than 10%.
Geopolitical tensions following an explosion at Iran's Bandar Abbas port were identified by observers as the primary reason investors moved away from risky assets like Bitcoin. The temporary US government shutdown, though anticipated to be brief, also added to macroeconomic concerns, making investors cautious.
According to Russell Thompson, chief investment officer at Hilbert Group, the cryptocurrency market is facing a widespread sell-off. This is not unique to Bitcoin, but due to its high sensitivity, the coin fluctuates more sharply and erratically.
Bitcoin is struggling to attract stable buying interest after a volatile month. Long-term investor confidence and potential buyers were tested as the price corrected by over 12% in the first month of the year. The world's largest cryptocurrency recorded its sixth consecutive month of underperforming gold. Funds show signs of shifting to precious metals, an asset class considered a safe haven during periods of economic and geopolitical instability.
Recent disputes among influential figures in the crypto community regarding the cause of a record liquidation event in October 2025 also negatively impacted market sentiment.
However, according to crypto analytics platform Santiment, an increase in bearish social media comments emerged as a rare bright spot amid the gloomy trading environment. "Crowd sentiment has hit extreme negativity. This excessive pessimism is a contrarian indicator, suggesting a short-term bottom may be very near," Santiment's report stated.
Concurring with this view, Matt Hougan, chief investment officer at Bitwise, believes the crypto market is in the final stages of forming a bottom in the bear market cycle. Historically, market movements tend to go against crowd sentiment.
Observers note that $75,000 has become a critical threshold to monitor. In April 2025, when the market faced selling pressure due to information related to President Donald Trump's reciprocal tax policies, strong buying interest emerged around $75,000, halting the sell-off.
In a worse-case scenario, if this price level is breached, Bitcoin is predicted to find equilibrium around the $58,000 mark.
Phuong Dong (Source: CoinDesk)
