OTC Trading Weekly: January 1-30 Market Square – Bitcoin's Steep Correction Amid Risk-Off Momentum

The January 1-30 trading square presented a harsh reality for cryptocurrency enthusiasts: while precious metals reached unprecedented heights, Bitcoin experienced a decisive breakdown through critical support levels. This week’s review examines the macro catalysts behind the selloff, technical deterioration, and structural capital rotations reshaping market dynamics.

Macro Turbulence Triggers Crypto Sector Selloff

Multiple risk factors converged to create a perfect storm for digital assets. The week began with positive US economic readings—Q3 2025 GDP expanded 4.4% quarter-over-quarter, exceeding the 4.3% consensus, while jobless claims printed at 200,000, signaling continued labor market stability. However, this economic strength masked emerging cracks in investor sentiment.

Microsoft’s post-earnings release on Thursday catalyzed immediate market repricing. Despite revenue and EPS beats, the company’s elevated guidance for capital expenditure on AI infrastructure raised questions about return on investment. The stock plummeted approximately 10%, dragging most AI equities lower with the notable exception of Meta. Concurrently, US-Iran geopolitical escalation triggered a classic flight-to-safety response, with precious metals experiencing explosive moves—gold briefly touched $5,600 while silver exceeded $120.

This divergence between traditional safe havens and digital gold proved decisive. Bitcoin absorbed these headwinds acutely, breaking decisively through the $84,000 support level previously identified as critical. The inability to rapidly reclaim this threshold opened a path toward $80,000 support and potentially the $74,600 low from April 2025.

Technical Breakdown: BTC Breaks Key Support as Structural Shifts Accelerate

The current BTC price of $69.05K reflects a 30-day decline of approximately 29.17%, representing the most significant monthly retreat in recent months. This breakdown carries particular significance given the technical and structural factors at play.

Bitcoin’s correlation with US technology equities has intensified during risk-off periods, indicating reduced safe-haven demand. More troubling, sustained outflows from crypto-focused ETFs underscore a broader capital rotation toward AI-concentrated positions. Long liquidations have accelerated sell-side pressure, creating a cascade effect through leveraged positions.

Perhaps most revealing is the mining sector’s response. Several major Bitcoin miners are repurposing infrastructure for AI and high-performance computing workloads—a trend reflected in mining difficulty declining over 4% in the past 30 days. This migration signals a temporary but meaningful shift in capital allocation away from crypto validation toward compute-intensive AI applications.

Capital Rotation Into AI: Crypto’s Short-Term Challenge

The structural headwinds facing crypto extend beyond price action into fundamental narratives. The AI investment euphoria, while economically rational given productivity gains, has created a zero-sum mentality among risk allocators. Capital that previously flowed into crypto as an alternative asset class now concentrates in AI-adjacent equities and infrastructure plays.

This rotation is particularly evident in how precious metals captured speculative demand while Bitcoin stalled. Gold and silver’s parabolic ascent—despite later retracing 8-10% from extremes—demonstrated that FOMO-driven momentum remains selective. Digital assets missed this rotation entirely, instead absorbing the fallout from disappointing tech earnings and geopolitical uncertainty.

Weekly Macro Summary: Central Bank Decisions and Economic Data

The January 22-28 period produced several noteworthy economic releases and policy decisions:

Early Week (January 22-24): US PCE inflation printed at 2.8% year-over-year for November, matching expectations and suggesting stable pricing conditions. Japan’s national core CPI accelerated to 2.4% in December before the Bank of Japan maintained its policy rate at 0.75% and revised FY2025 growth upward to 0.9% from 0.7%.

Mid-Week (January 26-27): US durable goods orders surged 5.3% month-over-month in November, substantially beating the 3.1% forecast. However, the Conference Board Consumer Confidence Index collapsed to 84.5 in January from 94.2 the prior month, falling well short of the 90.6 forecast and signaling deteriorating consumer psychology.

Late Week (January 28): The Bank of Canada held steady at 2.25% while the Federal Reserve maintained the federal funds rate at 3.75%, both in line with expectations. Chair Powell notably refrained from providing specific forward guidance on rate trajectories, avoided discussing USD volatility, and declined to comment on administration-related matters.

Long-Term Tailwinds Remain Intact Despite Near-Term Headwinds

Despite the near-term capitulation, structural support mechanisms for crypto adoption persist. Improving global liquidity conditions, combined with meaningful progress on regulatory frameworks in the US and internationally, create a foundation for recovery. Innovative applications in PayFi and Real-World Assets are gaining practical traction, suggesting the ecosystem’s functional evolution continues despite price weakness.

The precious metals rally, should it continue amid dollar weakness, could eventually spillover into digital asset demand. This scenario—combined with stabilizing macro conditions and continued institutional acceptance—positions crypto for potential acceleration once near-term liquidations conclude. The 30-day decline to $69.05K likely represents exhaustion rather than fundamental deterioration in the asset class’s long-term utility.

Current market conditions remain challenging in the intermediate term, with positioning dynamics favoring further consolidation. However, patient investors viewing the January 1-30 correction through a multi-year lens may find the risk-reward increasingly asymmetric as capitulation indicators flash across multiple markets.