Middle EastBitcoinMarkets
|3 min ReadWar Fear Wipes $603M: BTC Breaks $86k
Tariq Al-Saidi
Senior Analyst
Published
Jan 26, 2026
$603M was wiped out in 12 hours. BTC broke below $86,000 and ETH lost $2,800 because fear-driven capital ignored "digital gold" to bid physical metals. Gold and silver ripped to all-time highs of $5,041 and $107.80 respectively, fueled by Middle East war anxiety.
Polymarket Prices in Geopolitical Risk
The USS Abraham Lincoln entered the Middle East, pushing Polymarket odds for a US strike on Iran by February 28 to 53%. Simultaneously, betting odds for a US government shutdown spiked from 8% to 80%. This twin-risk environment forced risk-on capital into panic mode.
Institutional Bleed and Smart Money Divergence
Spot BTC ETFs recorded five consecutive days of outflows, peaking at $700M on January 21. ETH funds mirrored the bleed with a $229M daily exit.
On-chain data reveals a divergence. While retail wallets dumped, "whale" addresses holding 10-10k BTC accumulated 36,322 coins over nine days. Santiment data suggests this divergence historically precedes major trend reversals.
The Big Tech Wall
This week holds the final boss for risk assets: mega-cap earnings. MSFT, META, TSLA, and AAPL report directly into this fragile liquidity window.
Crypto correlations with the SPX remain high, meaning any AI spending disappointment will drag the Nasdaq down, pulling Bitcoin with it.
The market is pricing in World War III, but smart money is quietly front-running the inevitable liquidity bounce.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.