Market Overview
The cryptocurrency market experienced a volatile session, wiping out approximately $100 billion in just 24 hours. This significant drop occurred between January 18 and January 19, 2026. Data from multiple sources highlighted that the total market capitalization plunged from the range of $3.2-3.24 trillion to $3.09-3.22 trillion. This development was marked by thin liquidity owing to the Martin Luther King Jr. Day, when U.S. markets were closed.
Factors Contributing to the Market Decline
A series of events contributed to the market's downturn. These included the liquidation of $700-800 million in long positions. Approximately 240,000 crypto investors were affected as expectations for a Federal Reserve rate cut decreased following strong U.S. economic data and comments from Former President Donald Trump about Fed Chair hopeful Kevin Hassett.
Further exacerbating tensions, President Trump's announcement of a 10% tariff on goods from eight European Union countries stirred fears of a trade war. As a result, there was a notable flow toward safe-haven assets like gold and silver, which saw price bumps of 2.18% and 4.11%, respectively.
Impact on Major Cryptocurrencies
Significant tokens faced a downturn as well. Bitcoin (BTC) fell by 2-3%, going below $95,000 to $92,762. Ethereum (ETH) saw a decrease of 4.16%, dropping from $3,350 to $3,197. Meanwhile, XRP lost 4% of its value, while BNB's and Solana's (SOL) value went down by 2-9%.
Even Dogecoin (DOGE) was not spared, as its value declined by 5-9%. Notably, altcoins and DeFi protocols bore the brunt of the losses, with many experiencing drops of over 10% as leverage magnified the downside effect.
Market Recovery Attempts
There were attempts at recovery as the market bounced back slightly to reach $3.1 trillion. Despite this, the session illuminated the challenges faced by the cryptocurrency market when external geopolitical and economic factors come into play.
No significant on-chain changes were recorded, including Total Value Locked (TVL), liquidity, or staking flows. This reflects a broader shift driven primarily by derivatives and spot demand rather than fundamental changes in the crypto economy.
Historical Context and Comparisons
This recent turmoil had similarities with past events like the October 10, 2025 crisis, where tariff announcements led to large-scale liquidations. Historical bear markets in 2022-2023, which were influenced by rate hikes and geopolitical tensions, also offer context to the recent volatility.