Bitcoin’s price took a sudden dip below $100,000 on January 7, causing a major sell-off in the cryptocurrency market. The price dropped to $97,207, which triggered a wave of liquidations across crypto positions. According to Coinglass data, approximately $206 million worth of crypto assets were liquidated in just one hour, leading to a 4.5% decline in the total market cap, bringing it down to $3.44 trillion. Popular cryptocurrencies like Ethereum, XRP, and Solana also saw significant losses, each falling more than 5%.
The price crash comes just after a significant legal decision regarding Bitcoin seized from the Silk Road, a dark web marketplace shut down by authorities in 2013. A federal judge in California ruled on December 30, 2024, that the U.S. Department of Justice (DOJ) could sell 69,370 Bitcoins—worth around $6.5 billion—that were confiscated during the Silk Road investigation. This ruling followed a lengthy legal battle and has now cleared the way for the government to sell these assets. The massive amount of Bitcoin in government custody has raised concerns that the release of this supply into the market could further drive down prices.
The impact of this decision is already being felt, with many believing that the release of these Bitcoins is a major factor in Bitcoin’s recent price drop. The market is worried about the potential flooding of the market with such a large amount of Bitcoin, which could push prices lower.
In addition to the Silk Road news, recent economic data from the U.S. also contributed to the negative sentiment. Reports showing a spike in job openings and higher-than-expected bond yields have led to concerns that the Federal Reserve might tighten its monetary policy further. These factors combined have led to a sense of uncertainty in the market, causing further downward pressure on Bitcoin’s price.
As Bitcoin tries to recover, the focus will remain on how the U.S. government’s move to sell off the Silk Road Bitcoin will affect the market. The situation highlights the vulnerability of the volatile crypto market to actions from authorities and government decisions.
