The crypto market is undergoing a significant capitulation phase today, February 1, 2026, as Bitcoin ($BTC ) struggled to maintain a base above $78,500, marking its lowest levels since late 2025. This sharp downturn, which saw the total crypto market cap slide below $2.7 trillion, is largely fueled by extreme fear (18/100 on the sentiment index) following President Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair. investors are bracing for a more hawkish regime and a smaller Fed balance sheet, which typically sucks liquidity out of speculative assets.

The volatility was compounded by a broader global market rout, including a historic crash in Gold and Silver prices and geopolitical jitters stemming from tensions in the Middle East. While Ethereum ($ETH ) faced even steeper losses dropping nearly 10% to trade around $2,415 some analysts argue that this weekend wipeout is a necessary reset to flush out excessive leverage, as over $2.5 billion in positions were liquidated in just the last 24 hours.

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