Bitcoin Suffers Its Worst January in Years—Is the $75,000 Zone a Cycle-Defining Bottom?

If you’re looking for a market that can still surprise even the most jaded trader, look no further than Bitcoin’s latest faceplant. The world’s largest cryptocurrency just closed out January with a gut-wrenching 10.1% drop, landing at $78,700—over $45,000 below its cycle high, according to u.today (2026-02-01). That’s not just a bad month, it’s a full-blown sentiment reset. And if you believe the crypto faithful, this is exactly the kind of puke that sets up a February rally. But before you start stacking sats, let’s talk about what actually happened, why leverage traders are licking their wounds, and why Michael Saylor is posting “more orange” memes as if that’s going to hold the line.

The carnage wasn’t limited to Bitcoin. Ethereum slipped below $2,500 (newsbtc.com, 2026-02-01), and the broader crypto market endured its “most painful correction of the year,” per coinidol.com. Liquidations swept through the system. BitMine, a whale with 4.24M ETH on its books, is now nursing a $6 billion unrealized loss—yet, like a true degen, it’s still accumulating (blockonomi.com). Meanwhile, the so-called “Bitcoin treasury” crowd is deep in the red, but nobody’s blinking. Apparently, the new corporate treasury playbook is to lose millions and call it “conviction.”

Let’s not pretend this is all about crypto’s internal plumbing. The macro backdrop is the real villain here. Treasury issuance is draining liquidity, with the Treasury General Account hoovering up $64.3 billion from markets (seekingalpha.com). Risk assets everywhere are feeling the pinch. Bitcoin, for all its “digital gold” bravado, is trading like a high-beta tech stock with a gambling problem. And speaking of gambling, the WSJ reports that young men are flooding into betting markets, chasing dopamine hits instead of long-term returns. That’s not a sign of healthy market structure—it’s a symptom of too much leverage and too little patience.

Historically, Bitcoin’s worst Januarys have set up some of its best Februarys. But this time, the cycle feels different. The leverage flush was brutal, but not necessarily cleansing. The $75,000–$80,000 zone is being called a “potential cycle bottom” by analysts like PlanC (crypto.news, 2026-02-01), but the conviction feels thinner than usual. The spot ETF flows that powered last year’s rally have dried up. The narrative has shifted from “number go up” to “please stop the bleeding.”

The real story here isn’t just about price. It’s about psychology. The instant gratification crowd is getting washed out (coindesk.com), and the survivors are learning that diamond hands sometimes just mean holding a bag of rocks. The market is searching for a new equilibrium, and the next move will be defined not by memes, but by whether real money steps in to buy this dip—or whether the pain trade has more room to run.

Strykr Watch

Technically, Bitcoin is at a crossroads. The $75,000–$80,000 support zone is the last major shelf before a potential air pocket down to $68,000. RSI is oversold on the daily, but not yet at capitulation levels seen in prior cycle lows. Moving averages are rolling over, with the 50-day now threatening to cross below the 200-day—a classic “death cross” setup that could spook algos into another round of forced selling. Volume has spiked, but it’s mostly been on down days. If $80,000 fails to reclaim, expect the next leg lower to accelerate.

On-chain data shows long-term holders are still sitting tight, but short-term speculators are getting flushed. Funding rates have normalized after last week’s leverage wipeout, but open interest remains elevated. The market is still one headline away from another liquidation cascade. Watch for any signs of spot buying from ETFs or corporate treasuries—if that doesn’t materialize soon, the bid could evaporate fast.

The options market is pricing in extreme volatility for the next two weeks, with implieds well above realized. Skew is heavily negative, indicating traders are paying up for downside protection. That’s not a bullish tell. If you’re looking for a reversal, you want to see call buyers step in and force market makers to chase spot higher. So far, crickets.

If you’re trading this, the levels are clear: $75,000 is the line in the sand. Lose it, and the pain trade intensifies. Hold it, and maybe—just maybe—the February bounce narrative gets some legs.

The risk, of course, is that macro keeps tightening. Treasury issuance isn’t slowing down, and liquidity is being drained from every corner of the market. If equities roll over, Bitcoin won’t be spared. The correlation is still there, no matter how many times the maximalists scream “uncorrelated asset.”

On the flip side, if spot buyers step in and the macro backdrop stabilizes, this could be the kind of flush that sets up a monster rally. But you need to see real money, not just Twitter bravado. Until then, every bounce is suspect.

Strykr Take

This is a trader’s market, not an investor’s. The days of easy gains are over. If you’re buying this dip, use stops and size down. The pain trade isn’t finished until the last leverage junkie taps out. But if $75,000 holds, the upside could be explosive. Just don’t expect Michael Saylor memes to do the heavy lifting.