$1.8 billion liquidation sweeps through the crypto market! Is this a replay of the "October-style crash," or a deep shakeout?

January 30 News, as January approaches its end, the cryptocurrency market is experiencing its most severe test since 2026. After eight weeks of sideways movement, the market suddenly declined by about 7%, with risk sentiment sharply turning negative. Data shows that in less than 48 hours, the total market capitalization of cryptocurrencies evaporated by approximately $200 billion, triggering the largest liquidation wave of the year, with a total liquidation amount of about $1.8 billion, of which approximately 95% came from long positions.

This decline is not an isolated event. The US market also suffered heavy losses, with the combined market value of metals, stocks, and digital assets losing over $5 trillion, described by multiple institutions as a “ten-year” level of volatility. AMBCrypto pointed out that this synchronized decline across markets is changing investors’ perceptions of the correlation of risk assets.

Looking back to October 2025, the crypto market had weakened for seven consecutive weeks, with a total market cap decrease of about $1 trillion. At that time, gold prices rose, while crypto assets experienced a quarterly decline of nearly 24%. Rumors about Strategy potentially being included or removed from indices triggered a concentrated sell-off. Now, not only digital assets but also the US stock market are under pressure simultaneously, indicating a broader spread of risk.

It is worth noting that the macro environment still appears relatively positive on the surface. The crypto asset market structure bill was approved, and the government shutdown ended, easing policy uncertainty. However, attention quickly shifted to Donald Trump’s comments on the next Federal Reserve Chair candidate. As news related to Kevin Warsh fermented, market volatility increased, and derivatives sentiment noticeably tightened.

Under the interplay of multiple factors, this sharp decline seems more like a “collaborative” liquidation. Different asset classes are under pressure simultaneously, implying that the sell-off is not driven by a single fundamental change but by a systemic contraction of risk appetite. For some investors, this may be short-term pain; for others, it could be viewed as a window for rebalancing. In the short term, the market is likely to remain highly volatile.