The cryptocurrency market experienced a significant crash yesterday (January 31, 2026, into early February 1), with Bitcoin $BTC dropping sharply below $80,000 (reaching lows around $76,000–$78,000 in some reports), Ethereum $ETH and other major altcoins falling even harder (often 10%+), and total crypto market cap losing hundreds of billions in value. Liquidations exceeded $1–2 billion in a short period, amplifying the downside through forced selling.This wasn't isolated to crypto—it tied into a broader risk-off move across global markets, including sharp drops in stocks (especially tech), precious metals like gold and silver (despite prior rallies), and rising bond yields/dollar strength.Key Reasons for the CrashMultiple overlapping negative catalysts hit at once, especially amplified by thin weekend liquidity:Trump's nomination of Kevin Warsh for Federal Reserve Chair — Announced recently, Warsh is viewed as a monetary hawk who favors tighter policy, higher real rates, and less liquidity. This shifted expectations away from easy money (which crypto thrives on) toward potential tighter conditions, hurting risk assets like Bitcoin. Many analysts called this the primary trigger for the accelerated sell-off.
Geopolitical tensions — Escalating U.S.-Iran risks (threats, explosions/port incidents, potential strikes/retaliation), plus other issues like Middle East conflicts (e.g., Israel-Gaza strikes) and trade/tariff threats. These pushed investors out of speculative assets toward safety.
U.S. government/political uncertainty — Including a brief government shutdown and related fears, which added to macro caution.
Heavy ETF outflows and deleveraging — U.S. Bitcoin spot ETFs saw massive outflows (hundreds of millions to billions recently), reducing spot demand. Leveraged positions got wiped out in cascades, with thin liquidity magnifying moves.
Broader market correlation — Crypto moved in tandem with equities (tech sell-offs) and even "safe-havens" like gold got hit in the rout. Bond yields spiked, hurting anything risk-sensitive.
In short, it was a classic "risk-off" panic fueled by macro/policy fears (hawkish Fed pick + geopolitics), with crypto's leverage and weekend thin trading turning it into a violent flush. Bitcoin is now down ~30–40% from 2025 peaks, and sentiment has turned very bearish short-term, though some see it as a potential capitulation/washout phase.Markets remain volatile—watch Fed-related news, geopolitics, and ETF flows for the next moves. This is based on real-time reports as of early February 1, 2026.
$SOL and #bnb was also dropped notebaly.
#cryptocrash