Bitcoin slipped below the $88,000 level on Sunday as crypto markets weakened in thin weekend trading, extending a pullback that has weighed on the crypto market over the past week.
BTC was trading around $87,800 in US afternoon hours, down about 2% over 24 hours, according to CoinDesk data. Ether fell towards $2,880, while solana, XRP and cardano each saw losses between 3% and 5% on the day. Most major tokens have remained sharply down over the past seven days, reflecting the fragile sentiment across the market.
The move caused $224 million in liquidations on bullish bets in the last 24 hours, led by $68 million on bitcoin-tracked futures and $45 million on ether-based futures, according to CoinGlass data.
Weekend moves are often driven less by fresh information and more by position adjustments, especially after periods of heightened volatility earlier in the week.
Traders enter the new week on heightened alert for possible intervention in the Japanese yen after Prime Minister Sanae Takaichi warned of “abnormal” market moves, comments that followed a sudden reversal in the yen late Friday.
The currency’s sharp rise raised caution across Asian trading desks, even as officials stopped short of confirming any action, according to Bloomberg.
The shutdown trade
Elsewhere, political risk in the US added to an already unclear background.
Senate Democratic Leader Chuck Schumer said his party would block a major spending package unless funding for the Department of Homeland Security is removed, raising the risk of a partial government shutdown.
While such deviations are well known, they can tighten liquidity conditions in the short term and weigh on sentiment across risk assets, especially during periods of high positioning.
Earlier, heading into a potential government shutdown, bitcoin has historically seen a selling push followed by a rally.
Currently, Polymarket traders are putting a 76% chance of a US government shutdown by the end of this month.
Read More: Previous US Government Shutdown Aligns With Bitcoin’s Bear Market Bottom
Big Tech earnings
Attention now turns to the week ahead, where investors are also eyeing a heavy earnings week that includes results from several megacap tech companies, including Microsoft, Meta Platforms, Tesla and Apple among the “Magnificent 7” tech giants.
Traders will be watching for any clues about how these companies’ earnings trends are shaping artificial intelligence (AI)-related results. And the market is likely to move based on their comments on the AI industry outlook. Bitcoin, now trading as a risk asset, may also move with these results and comments.
Meanwhile, the Federal Reserve’s first interest rate decision this year will also be widely watched by traders. While the Fed is expected to keep interest rates steady at its upcoming meeting, the market will be closely watching what Chairman Jerome Powell says during his post-meeting press conference, which could move bitcoin and other asset classes.
Read more: Here’s what the Fed’s highly anticipated interest rate decision this week means for bitcoin and the dollar
UPDATE (Jan 25 at 18:13 UTC): Updates throughout with data and additional context.
