As Gold soars, Bitcoin plunges below $85,000

Bitcoin dropped below the $85,000 level on Wednesday, January 29th, for the first time since early December, as investors continued to withdraw from risk-correlated assets.

The world's leading cryptocurrency dropped by as much as 5.7% to $84,233. 

Leading altcoins like Ether, Solana, and Cardano dropped by at least 6%.

This development comes as the cryptocurrency market has been in a downtrend since early October. This is in contrast to the recent surges in the traditional safe-haven assets like gold and tech stocks.

Analysts attribute the extreme drop to Bitcoin’s continued correlation with traditional risk sentiment.

Based on data from Coinglass, liquidations have accelerated, with around $785 million in cryptocurrency positions liquidated in the last 24 hours.

This has caused Bitcoin to fall about 33% from its October high of $126,200.

The market structure seems weak, with open interest in Bitcoin futures near yearly lows. Although there is some technical support around the $84,000 level, a break below could signal a test of lower levels, analysts say.

This development underscores the asset class's sensitivity to macroeconomic pressures and the absence of independent bullish triggers.