The price of Bitcoin fell to a new monthly low of $86,126 on Monday, January 26, 2026, as traders reacted to a confluence of bearish macroeconomic and geopolitical headlines. The decline pushed the total crypto market capitalization briefly below the $3 trillion threshold and saw the crypto fear and greed index drop 5 points to 29, indicating deepening 'Fear' sentiment.
The primary catalysts for the sell-off were renewed trade tensions and political uncertainty. Former President Donald Trump's threat to impose 100% tariffs on Canadian imports, citing concerns over a potential Canada-China trade agreement, sparked initial market anxiety. Although Canadian officials denied any such deal, the shock contributed to over $100 million exiting the crypto market. Concurrently, fears of a US government shutdown grew as a funding bill faced resistance in the Senate, potentially delaying crypto-related legislation like the CLARITY Act.
The downturn triggered significant liquidations in the derivatives market, with $605 million in long positions wiped out early Monday. This included $179.8 million from Bitcoin futures and $203.6 million from Ether contracts. Some capital appeared to rotate into traditional safe havens like gold, which has risen over 17% year-to-date and crossed the $5,000 mark.
Market analysts are now focused on upcoming US economic events for direction. The Federal Reserve's first policy meeting of 2026 is scheduled for Wednesday, with most analysts expecting rates to be held steady after a 25-basis-point cut in December. Additionally, the release of December's Producer Price Index (PPI) data is being closely watched, as a high reading could reinforce bearish pressure.
Technically, analysts are divided on Bitcoin's near-term path. Some, like Friedrich and Ted Pillows, point to unfilled CME gaps around $89,500 and $93,000 as potential price magnets for a recovery. Others, like Tazman, highlight a descending channel on the daily chart, with the next target around $85,000. At press time, Bitcoin was trading at $87,419.
While the broader altcoin market was volatile, a few tokens posted significant gains. River (RIVER) surged 30% following news of a funding round with participation from Justin Sun and Arthur Hayes, aimed at bridging its stablecoin infrastructure to the Tron network. Axie Infinity (AXS) gained nearly 14% after implementing economic reforms to reduce inflation and curb bot farming. Algorand (ALGO) rose 7%, buoyed by a recent Kraken exchange integration for USDC.
