Key Insights:
- Hayes relates a $300 billion decrease in dollar liquidity to the plunge in Bitcoin USD price.
- The U.S. Treasury General Account (TGA) and Federal Reserve balance sheet are key indicators that are contributing to this drop
- Bitcoin is no longer considered a “safe haven” asset since it has been reflecting global liquidity trends.
On January 30, 2026, the crypto market plunged after Bitcoin price dropped from recent record levels. There was a massive sell-off in the market that pushed Bitcoin (BTC) USD below $81,000.
This set off a chain of liquidations across the market. Positions worth $1.7 billion were closed within 24 hours.
This massive liquidation shook the crypto space. As a result of this incident, various debates among market participants and analysts ensued.
BitMEX co-founder Arthur Hayes shared his view on this matter. In his opinion, the BTC price dip was not surprising.
Hayes linked the incident to the U.S. Dollar liquidity squeeze that has been occurring in the past few weeks.
Moreover, Hayes also considered the overall economic situation, noting that the U.S. fiscal policy and the global financial issue had an impact on the market.
His perspective transformed the discussion from the usual crypto-centric reasons to a broader view of the influence of the global economic forces on the crypto prices.
Bitcoin Price Slips, Crypto Liquidity Squeeze Causes
One of the major causes of the liquidity squeeze in the financial markets was the doubling of the US Treasury General Account (TGA). It has recently climbed up to $200 billion.
Arthur Hayes noted that the large increase in the TGA may have been a precautionary measure made by the government to avoid a shutdown.
Nevertheless, this move unexpectedly caused a tighter money supply. It resulted in a shortage of funds in the market, impacting a broad spectrum of assets, including Bitcoin USD price.
Typically, these crypto assets generally depend on market liquidity for their price changes.
Bitcoin (BTC) as a Risky Asset
The extraction of liquidity visibly affected different speculative investments, including Bitcoin price. Hayes illustrated that the perception of Bitcoin (BTC) has changed over the years.
Initially, BTC price was seen as a safe-haven asset. However, this perception has been altered since we are in an era of limited liquidity,
Instead of being a safe and stable option for investors, Bitcoin USD price has begun behaving like any other risky asset. As liquidity became limited and the financial markets began to experience a strain, investors began to sell assets, including Bitcoin, to get cash.
Consequently, Bitcoin’ price went down along with other risky investments. This change in BTC USD’s nature signified that it is no longer a “safe haven” asset since it has been reflecting global liquidity trends.
Crypto Market Liquidity Indicators
Arthur Hayes has pointed out some indicators that analysts should take into consideration when predicting Bitcoin price movements.
They include the weekly Treasury General Account (TGA) balance of the U.S. Treasury and the Federal Reserve’s balance sheet.
These two indicators have a huge impact on the liquidity of the market. Hayes is of the opinion that the behaviour of Bitcoin USD price in the future is largely dependent on liquidity.
If appropriate adjustments are made to the TGA or the Federal Reserve balance sheet, liquidity can increase, allowing the price of Bitcoin to shoot up again.
Until then, BTC USD price has the propensity of dropping lower.
Bitcoin USD Price Analysis
On the Bitcoin (BTC) price chart, a bearish flag is currently forming, indicating bearish momentum. This pattern is formed after an intense downward move is followed by a period of consolidation.
Bitcoin USD price has failed to hold above the trendline below the flag and has broken below it. There is a probability that BTC will drop by a distance equal to its initial drop.
This is known as a measured move. The next downward target predicted through the measured move is around $70,000.
Moreover, traders who are monitoring Bitcoin price would primarily focus on short-term support and resistance levels. On January 29, 2026, the flagship crypto dropped to a yearly low, almost touching the $81,000 mark.
This was the same level as the low of Bitcoin in November 2025. If the asset’s price falls below this level, the drop could extend to the $75,000 area.
On the other hand, any recovery rally would have to reclaim the $86,000-$87,000 range, which currently serves as a resistance zone.
A break above this area would indicate a change in momentum. However, the market appears to be under pressure, with bears currently dominating.
Source: https://www.thecoinrepublic.com/2026/01/31/top-expert-reveals-reason-behind-bitcoin-price-dip/
