NEW YORK – The cryptocurrency market suffered one of its most volatile stretches in recent history this weekend, as Bitcoin ($BTC$) plummeted over 10% to hit a multi-month low near $75,000. The crash, which began in earnest on Friday, January 30, and accelerated through Saturday, has wiped out over $300 billion from the total crypto market capitalization, leaving investors scrambling to identify a floor in a rapidly shifting macroeconomic landscape.
The “Warsh Shock” and Macro Headwinds
The primary catalyst for the downturn appears to be a sudden shift in sentiment regarding U.S. monetary policy. On Friday, January 30, President Donald Trump announced the nomination of former Federal Reserve Governor Kevin Warsh to succeed Jerome Powell as the next Fed Chair.
While the administration has maintained a pro-crypto stance, the market responded with “risk-off” anxiety to the prospect of a more hawkish regime. Warsh is perceived by many analysts as a candidate who might prioritize a stronger U.S. dollar and more aggressive inflation-fighting measures. Following the announcement, the dollar saw its biggest rally since mid-2025, creating immediate downward pressure on non-yielding assets like Bitcoin and gold.
A Cascade of Liquidations
The price action turned from a controlled retreat into a full-scale rout as key technical support levels failed to hold. When Bitcoin broke through the psychological $85,000 mark and subsequently the $82,500 neckline, it triggered a massive “long squeeze” in the derivatives market.
According to Coinglass data, over $1.8 billion in crypto positions were liquidated within 24 hours. Of that, Bitcoin and Ethereum accounted for the vast majority. The weekend’s lower liquidity amplified these moves, as automated sell orders overwhelmed thin buy-side support, at one point driving the price down to $75,644 on major exchanges.
Institutional Retreat and ETF Outflows
The institutional “wall of money” that buoyed Bitcoin throughout 2025 showed signs of significant cracks this week. Spot Bitcoin ETFs recorded a net exit of over $1.1 billion, marking one of the worst weeks for fund inflows since their inception. Analysts suggest that institutional players are rotating capital into “defensive” positions or cash as they wait for clarity on the new Fed leadership’s stance on digital assets.
Adding to the gloom, a report from research firm CryptoQuant noted that Bitcoin holders have slipped into the “red” for the first time since October 2023. The “realized market value”—the average cost basis of the current active supply—was breached at $80,700, a signal that often marks the transition from a bull to a bear market phase.
Altcoin Carnage and “Digital Gold” Comparison
Bitcoin was not the only casualty. Ethereum ($ETH$) dropped nearly 10% on Saturday to trade near $2,600, while popular altcoins like Solana ($SOL$) and XRP saw double-digit weekly losses.
Interestingly, Bitcoin’s “digital gold” narrative was put to a unique test this week. While gold prices also faced pressure—dropping as investors chose the U.S. dollar as the preferred safe haven—Bitcoin’s drop was slightly more pronounced. This has led some critics to argue that Bitcoin remains a high-risk tech trade rather than a stable store of value during times of intense geopolitical or macroeconomic uncertainty.
Is the Bottom In?
Despite the carnage, some on-chain metrics provide a glimmer of hope for the “HODLers.” Data from Bitcoin Magazine Pro indicates a surge in new Bitcoin addresses over the last 24 hours, hitting a two-month high. This suggests that while whales and institutions may be de-risking, retail interest is beginning to view the $75,000–$78,000 range as a potential “value zone.”
“The market is in a deleveraging phase,” said one technical analyst. “We’ve flipped the 50-day moving average from support into resistance. Until we reclaim $82,000, the path of least resistance remains sideways or down.”
News Sources & References
- Hindustan Times: ‘Why is Bitcoin down today?’: Crypto platform founder gives stark warning amid fresh crash
- Bitcoin Magazine: Bitcoin Price Crashes to $75,000 Range As Broader Crypto Market Sells-Off
- Trending Topics: Bitcoin crashes to $77,000, altcoins plunge by double digits
- DL News: What nuked Bitcoin? Price threatens to crash below $80,000
- Global Banking and Finance Review: Bitcoin falls below $80,000, continuing decline
- The Economic Times: Bitcoin sinks below $82,000, lowest in 2 months as Fed chair speculation rattles risky assets
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