Crypto Market Crash Today: Bitcoin Tumbles to $87,850 After Fresh Sell-off

The cryptocurrency market is under fresh pressure as Bitcoin faces significant headwinds today. BTC retreated sharply following a brief attempt to reclaim higher ground near $88,800, sliding to $87,850 as the ongoing sell-off extends through its second month of struggle. Over the past 24 hours, Bitcoin declined 0.15%, while its seven-day performance shows a steeper 5.72% pullback. Current trading volume stands at $1.28 billion, with Bitcoin’s market capitalization holding at approximately $1.755 trillion across a circulating supply of roughly 19.98 million coins.

The recent crypto crash today stems from multiple structural pressures converging simultaneously. Earlier this week, a brief rally had tested $88,800 following the release of U.S. inflation data, which showed December CPI rising 2.7% year-over-year—cooler than anticipated. The core inflation reading, excluding food and energy, fell to 2.6%, marking the lowest level since early 2021. This development initially sparked optimism about potential Federal Reserve rate cuts, as traders interpreted the easing inflation environment as supportive for looser monetary policy in 2026. CME FedWatch data suggested slightly elevated odds of a rate cut by March, though January moves remain unlikely.

However, the crypto rally proved short-lived. Bitcoin failed to break decisively above $88,000 and subsequently retreated lower, establishing a familiar pattern: sharp spikes followed by swift retracements that leave investors frustrated.

Multiple Pressures Weighing on Bitcoin in Today’s Market

Several interconnected factors are compounding the downward pressure on BTC. A critical structural headwind emerges from U.S.-listed spot Bitcoin ETFs. These funds, once celebrated as institutional demand drivers, have experienced consistent net redemptions. The ongoing outflows represent a substantial loss of institutional capital that previously helped support price floors during consolidation phases.

Beyond ETF dynamics, mixed economic signals amplify uncertainty. Recent labor market data revealed U.S. unemployment climbing to 4.6%, the highest reading since 2021. Job creation remains uneven and inconsistent. These contradictory signals complicate Federal Reserve decision-making, suggesting monetary authorities will maintain a more measured approach despite moderating inflation trends.

Political considerations add another layer of complexity to the macro backdrop. President Donald Trump has publicly advocated for lower interest rates and hinted at potentially nominating a Federal Reserve chair who favors aggressive easing. While markets have largely dismissed these statements as noise, they introduce an additional variable into an already complex macro environment.

From a technical perspective, Bitcoin is consolidating rather than establishing a definitive trend. Resistance forms in the $88,000-$90,000 zone, with substantial supply above these levels held by investors who accumulated during prior rallies. The Fear and Greed Index currently registers at 17/100, signaling extreme fear conditions. Historically, sentiment readings in this range have coincided with potential undervaluation opportunities, though current market structure remains cautious.

Technical Support Breakdown: Is $70,000 on the Horizon?

Bitcoin Magazine’s technical analysts have flagged critical concerns regarding the $84,000 support level, warning that additional pressure could trigger a deeper decline. Should Bitcoin break decisively below this threshold, the next target zone would encompass $72,000 to $68,000. While initial bounces are anticipated from this lower zone—potentially retesting $84,000—bears currently maintain directional control.

The near-term technical picture suggests momentum favors sellers. Last week’s weekly close finished in red territory, as Bitcoin failed to sustain gains near $94,000. Bears are well-positioned to drive prices lower in the current session.

Bitwise researchers have suggested an alternative scenario: Bitcoin could potentially break its traditional four-year cycle pattern. The firm speculates that BTC might achieve new all-time highs in 2026 characterized by lower volatility and reduced correlation to equity markets. However, this optimistic scenario requires substantial buying volume to overcome resistance levels extending from $94,000 to $118,000.

At current levels of $87,850, Bitcoin remains locked in a delicate balance between fear-driven selling and contrarian accumulation signals. The crypto market crash today reflects both immediate technical weakness and lingering structural challenges from institutional redemptions, creating an environment where directional conviction remains elusive.