Yeliz Akmaca 
The crypto market saw a sharp unwind on January 20, 2026. Rapid intraday price drops triggered a cascade of liquidations. Over 182,000 traders had positions forcibly closed, resulting in total losses exceeding $1.08 billion. This wasn’t merely a price drop—it reflected risk that had built up and exploded all at once.
Long Positions Collapse
Nearly all liquidations came from long positions. Bitcoin lost around $427 million in long trades, Ethereum over $374 million, while shorts were under $80 million. This skew highlights how one-sided the market reaction was.
Liquidation pressure hit several exchanges hard within just four hours. Hyperliquid, Bybit, and Binance saw hundreds of millions wiped out. On Bitget, a single BTC position of $13.5 million was liquidated, marking one of the day’s largest moves.
As prices fell, collateral proved insufficient. Exchanges automatically sold positions, pushing prices lower and triggering further forced liquidations.
Technical Weakness Had Been Building
Technical indicators had hinted at this fragility. Most altcoins traded below an RSI of 50 for days, signaling persistent selling pressure. Liquidation-to-open position ratios spiked across markets, confirming this was a direct leverage reduction rather than a temporary pullback.
Capital loss, not just price decline, left its mark. Funds removed from the market reduce buying power, limiting potential recovery.
Japan’s Yields Squeeze the Market
The backdrop wasn’t just technical. In Japan, 30-year government bond yields hit 3.86%, and 10-year yields rose to 2.34%, record highs in modern times. Japan has long underpinned global carry trades, with cheap yen borrowing fueling riskier assets like crypto. Rising yields are pulling capital back home.
The Bank of Japan has limited room to maneuver. Yield control pressures the yen; tighter policy could unsettle global markets. Both scenarios pose challenges for risky assets.
Davos Forum and Regulatory Uncertainty
The World Economic Forum in Davos also amplified caution. Discussions on regulation weigh heavily on crypto, and even absent concrete decisions, uncertainty alone impacts prices.
The market now faces technical weakness, depleted capital, and tighter global liquidity simultaneously.
Short-Term Relief Looks Limited
Many leveraged traders are already sidelined, constraining potential bounce-backs. Prices may remain under pressure until new capital enters or macro conditions ease. Market participants are now watching both Japan and Davos for signals, while volatility is expected to continue in the short term.
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