3 Reasons Why Bitcoin Lost Ground in Late January

Bitcoin experienced a sharp decline of 8.3 within 24 hours, hitting an intraday low of 75,555 on Bitstamp by January 31, 2026. This slump dragged the total crypto economy down to approximately 2.6 trillion, a level not seen since April 2025. Analysts point to three primary factors creating bearish pressure, leading to a 13.6 weekly drop.
The first factor involves massive institutional selling from ETFs and miners. On January 30, spot crypto ETF investors withdrew nearly 1 billion, with 528.3 million exiting Bitcoin funds specifically. Simultaneously, Glassnode reported that miners are consistently sending BTC to exchanges, creating structural sell-side pressure as operational stress spreads across the mining sector.
Escalating geopolitical tension between the US and Iran has reclassified Bitcoin as a risk-off asset. Reports of increased strikes and explosions in Iran, coupled with the deployment of the Trump Armada to the Middle East, have drained market liquidity. A high-ranking Gulf official told Fox News:
Saudi Arabia will not allow the US to use its bases or airspace for an attack on Iran.
This uncertainty has also impacted precious metals like gold and silver.
Regulatory stagnation acts as the third catalyst, as the threat of a US government shutdown on January 31, 2026, paused the CLARITY Act. This bipartisan initiative was designed to establish clear oversight by the SEC and CFTC. The legislative deadlock and paralyzed SEC operations have frozen new approvals, creating a regulatory dead zone that discourages fresh capital inflows.
In summary, institutional liquidations, war fears, and the delay of pro-crypto reforms have formed a perfect storm. Experts suggest that Bitcoin will remain stuck under these macroeconomic headwinds until a new catalyst emerges or geopolitical tensions ease. The market currently lacks the liquidity needed to counteract these dominant sell signals.