Bitcoin dropped below $90,000 on January 21 amid escalating U.S.-EU trade tensions over Greenland, triggering over $860 million in forced liquidations and ending a brief early-January rally attempt.
The decline pushed BTC to $89,200 intraday lows during U.S. market hours, marking its lowest levels since early January when the asset briefly touched $94,000 before failing to sustain momentum above key resistance.
Bitcoin's death cross pattern - formed in November 2025 when the 50-day moving average crossed below the 200-day average - remains in place, with technical indicators pointing to continued consolidation within the $84,000-$94,000 range that has confined price action for two months.
What Happened
Data from CoinGlass shows $860 million in total liquidations occurred over 24 hours ending January 20, with long positions accounting for approximately 91% of forced closures.
President Trump's tariff threats targeting eight European countries over Greenland opposition triggered risk-off sentiment, with gold surging above $4,400 per ounce while Bitcoin declined.
Bitcoin ETF flows demonstrated institutional uncertainty, with $1.2 billion in inflows during the first two trading days of 2026 followed by $243 million and $476 million in outflows on subsequent sessions.
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Why It Matters
The failed breakout above $94,000 and subsequent decline below $90,000 tests the resilience of Bitcoin's two-month consolidation range, with analysts identifying $80,000-$85,000 as the next major support zone if current levels fail to hold.
Bernstein analysts previously called $80,000 the cycle bottom in late November, suggesting this level carries significant psychological weight for institutional positioning.
Bitcoin's correlation with the Nasdaq 100 reached 0.80 on January 20 - the highest in nearly four years - challenging the "digital gold" narrative as the asset trades more like a tech stock than a safe haven.
The death cross formation historically signals extended consolidation periods, with Bitcoin spending weeks trapped in narrow ranges following similar technical setups in previous cycles.
Market observers note that while leverage has been flushed and open interest remains below October 2025 highs, bulls must reclaim $93,500-$94,000 with sustained volume to invalidate bearish technical structure and attempt a move toward psychological resistance at $100,000.
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