$BTC
BITCOIN PRICE CRASH EXPLAINED: Panic or Planned Move?
The crypto market is currently reeling from a historic sell-off. As of February 3, 2026, Bitcoin has plummeted below the psychologically critical $75,000 mark, wiping out billions in market cap in just a few days.
Here is the breakdown of the "Perfect Storm" that triggered this crash:
1. The "Warsh Effect" & Monetary Shutdown
The primary spark was the nomination of Kevin Warsh as the next Fed Chair. Wall Street immediately interpreted this as a shift toward aggressive monetary tightening. The era of "cheap money" is abruptly ending, causing a massive liquidity shock that hit high-risk assets like BTC first.
2. "Black Sunday II" Liquidations
On Sunday, February 1, the market witnessed one of the largest liquidation events in history. Over $2.2 billion in leveraged long positions were forcibly closed in a single 24-hour window. This created a "cascade effect" where falling prices triggered more liquidations, which pushed prices even lower.
3. The Safe-Haven Identity Crisis
Bitcoin’s long-touted status as "Digital Gold" has completely decoupled. While traditional gold also saw a sharp 12% drop (its largest since the 80s), Bitcoin fell much harder, moving in lockstep with crashing technology stocks rather than acting as a hedge. The correlation with the Nasdaq 100 has hit a record 0.8.
4. Geopolitical & Tariff Stress
New tariff threats from the U.S. administration and deadlocked negotiations in the Middle East have pushed investors into the U.S. Dollar. As the DXY (Dollar Index) surges, "non-yielding" assets like Bitcoin and Gold are being sold off to cover margin calls in other sectors.