Published: January 29, 2026
Bitcoin plunged to a local low of $87,892 over the weekend of January 25–26, 2026 — its weakest level of the year — before rebounding modestly and consolidating near $88,950–$89,300 as of January 29. The sell-off was triggered by the Federal Reserve’s widely anticipated decision on January 28 to hold the federal funds rate steady at 3.50%–3.75%, dashing hopes of an early 2026 rate cut and reinforcing a “higher-for-longer” narrative amid sticky inflation readings and renewed tariff threats. The move was amplified by the largest weekly net outflows from U.S. spot Bitcoin ETFs since February 2025 (~$1.3 billion), continued stablecoin supply contraction, and broad risk-off sentiment across global markets. Despite the sharp correction — down roughly 30% from the late-2025 cycle high near $126,000 — on-chain metrics show no widespread panic distribution among long-term holders. This article provides a complete timeline, primary drivers, technical analysis, ETF flow breakdown, recovery catalysts to watch, and practical trading setups on Tapbit for navigating the current consolidation zone in early 2026.
Bitcoin Price Action Timeline – January 2026 Correction
| Date (UTC) | Price Range | Change | Key Trigger / Context |
|---|---|---|---|
| Jan 24–25 | $92,200 → $89,800 | -2.6% | Pre-Fed caution + weekend thin liquidity |
| Jan 26 (Sunday) | $89,800 → $87,892 (low) | -2.1% | Liquidation cascade; $1B+ leveraged positions flushed |
| Jan 27 (Monday) | $87,892 → $89,100 | +1.4% | Dip-buying & short covering |
| Jan 28 (FOMC day) | $89,100 → $90,600 (intraday high) | +1.7% | Initial relief rally post-Fed hold |
| Jan 29 (current) | ~$88,950–$89,300 | -1.2% intraday | Consolidation after early spike fades |
The weekend low of $87,892 represented the deepest single-leg correction of 2026 so far, but the swift recovery above $88,000 and lack of follow-through selling prevented a deeper capitulation.
Primary Drivers of the Bitcoin Drop to $87,892
Multiple overlapping factors converged to create the sell-off:
- Fed Rate Hold & Dissenting Voices The FOMC maintained rates at 3.50–3.75% on January 28, with two dissenting votes (Miran & Waller) calling for a 25 bps cut. Markets interpreted the majority stance as “higher-for-longer,” reducing expectations of aggressive easing in H1 2026.
- Record ETF Outflows Spot Bitcoin ETFs recorded $1.3 billion in net weekly outflows — the largest since February 2025 — as institutions rebalanced or took profits after late-2025 highs.
- Stablecoin Liquidity Contraction USDC supply fell ~$6.5 billion, reducing on-chain liquidity and forcing deleveraging across perps and lending protocols.
- Macro & Geopolitical Risk-Off Renewed tariff threats (Canada/China), US–NATO Greenland rhetoric, and Middle East tensions contributed to broad risk aversion, pushing capital toward gold ($2,680+) and Treasuries.
- Liquidation Cascade Over $1 billion in leveraged positions were liquidated during Sunday’s drop, amplifying the move through forced selling.
Technical Levels & Recovery Signals (BTC/USD)
Current ~$88,950–$89,300 (Jan 29)
- Immediate Support: $87,500–$88,000 (prior breakout zone)
- Critical Support: $86,000–$86,400 (2026 low; strong psychological & volume cluster)
- Next Resistance: $90,000–$91,000 (round number + 50-day EMA)
- Recovery Target: $94,000–$96,000 (Fib 0.618 retracement from Dec high)
- RSI (Daily): ~42 → oversold, room for bounce
- Volume: Drying up on downside candles → selling exhaustion
Key bullish signal: sustained trade above $90,000 + ETF inflow reversal would confirm the $86,400–$87,892 zone as the cycle low.
Trading Strategies & Positioning on Tapbit
- Create your Tapbit account (0% maker fees)
- Deposit USDT or JPY via bank transfer / P2P
- Spot DCA accumulation: Buy BTC/USDT on dips toward $87,500–$88,000 (strong demand zone)
- Futures rebound play: Long BTC/USDT perpetuals on reclaim of $90,000 (20–50x leverage, isolated margin)
- Macro hedge: Long XAU/USDT perpetuals if risk-off sentiment re-intensifies
- Risk control: Max 1–2% account risk per trade; trailing stops below $86,000
Conclusion & Near-Term Outlook
Bitcoin’s weekend plunge to $87,892 — the lowest level of 2026 — was triggered by the Federal Reserve’s decision to hold rates steady at 3.50%–3.75% on January 28, combined with $1.3 billion in spot ETF outflows (largest weekly since Feb 2025), stablecoin liquidity contraction, and weekend liquidation pressure. The swift rebound and stabilization near $88,950–$89,300 suggest the most acute panic phase may have passed, with on-chain metrics showing continued long-term holder accumulation and declining exchange balances. The $86,000–$88,000 zone remains critical support; a decisive break above $90,000 would confirm recovery momentum.
Trade Bitcoin dips & Fed-related volatility on Tapbit:
Disclaimer: Cryptocurrency trading involves significant risk of loss. Prices are highly volatile and can change rapidly. ETF flows and Fed decisions are subject to interpretation. This article is for informational purposes only and does not constitute investment advice. Always conduct your own research (DYOR) and never invest more than you can afford to lose completely.
