2026-01-20 02:28:01

On January 20, 2026, the global digital asset market experienced a sudden flash crash. BTC rapidly dropped below $92,000 within an hour from a high of $95,000, and ETH fell more than 4%, losing the $3,200 support level.

The trigger for this sharp decline was the escalation of geopolitical tensions. The sudden announcement regarding tariffs and trade policies triggered risk-off sentiment in the market, prompting investors to withdraw funds from digital markets and flock to traditional safe-haven assets such as gold, silver, and the Japanese yen (related safe-haven assets subsequently hit new highs).

Setting aside external factors, from an internal market perspective, this was a major purge of leveraged long positions. A large number of long positions had accumulated around the $95,000 mark, with many participants mistakenly believing a new bull market was about to begin. Liquidation data shows that out of approximately 600 million in total liquidations across the network, 97% came from forced liquidations of long positions, meaning about 250,000 bullish traders were forcibly liquidated in an instant.

On-chain data reveals an interesting detail: on the night before the flash crash, billions worth of assets were withdrawn from exchanges, and professional institutional investors had already hedged their risks by purchasing put options. When risk appetite suddenly plummeted, high-position digital assets were the first to be forcibly liquidated. The market’s long-term accumulated high leverage acted like an accelerant—once prices hit stop-loss levels, automated system triggers led to a chain of forced liquidations, creating a terrifying downward spiral.

The ultimate lesson from this event is: the value of spot investing lies in avoiding extreme risks. In markets with high risk, institutions aren’t afraid of your profits—they’re afraid of your non-participation. Winning nine times doesn’t matter; a tenth liquidation can wipe out all gains instantly. Recognizing market realities is far more important than daydreaming.

Disclaimer: The above is a market opinion analysis for discussion purposes only and does not constitute investment advice.

BTC-1,71%

ETH-3,32%

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All-InQueen

· 8h ago

250,000 people have been wiped out, truly spectacular. No wonder the old hands are just lying flat in spot trading.

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consensus_whisperer

· 8h ago

Once again, it's the leverage players getting wiped out. 250,000 people liquidated in an instant—that's the market's gentle side. Institutions really left long ago; we're retail investors still picking up the pieces. Spot trading is nice; at least I can sleep peacefully without watching the K-line all day. Every time there's a purge like this, someone ends up losing everything. People say spot trading avoids risk, but buying high is also a trap. This time, with geopolitical tensions, safe-haven assets exploded. Gold and silver hit new highs, and the crypto world got stabbed in the back. 6 billion in liquidation, over 97% of longs? That data looks a bit painful. Leverage is harmful.

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LightningLady

· 8h ago

250,000 people were instantly cleared out; this is the crypto world. It's the same old story: institutions have long been lurking, and retail investors are the ones who end up holding the bag. Spot trading is the true way; playing with leverage is really gambling with your life. I just want to ask those who are shouting that the bull market has started, how are you doing now? Remember, not participating is also a way to win.

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GateUser-74b10196

· 8h ago

It's the leverage's fault again. 250,000 people were eliminated in an instant, it's painful to watch.

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EternalMiner

· 8h ago

It's the same old trick of institutions harvesting retail investors, 250,000 people out of the game together, hilarious --- I've always said leverage is poison, and this time I finally tasted it --- I just want to know how those institutions knew in advance, insider information? --- Spot trading is the real way, contracts are just a casino --- The wave of 95,000 people who entered was foolish, I prefer to stay flat and win --- Have they already set up bearish options? How idle are these institutions --- 6 billion in liquidation, just thinking about it is terrifying, leverage is really not worth playing --- Another bloody lesson, are there still people pushing leverage? --- This is called being harvested, the higher the participation, the worse the loss, a paradox

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LuckyBlindCat

· 8h ago

Another grand clean-up show, with 250,000 people sacrificed. I told you leverage is poison. Institutions have already left, and we're still waiting for a bull market. LOL 9 wins and 1 loss, all gone. This is the magic of the crypto world.

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hodl_therapist

· 8h ago

It's the leverage again causing trouble, 250,000 people revert to the pre-liberation era in a second. Institutions are eating the meat while we drink the soup, and we still have to watch out for poison in the soup. Spot trading is probably the only way to make real money and stay alive. This round of liquidation is really brutal, it hurts just to watch. Nine times making money, once clearing the field— is that all? What's the point of playing this game?

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