On the last day of January, the value of Bitcoin fell below the psychological mark of $80,000 for the first time in a long time, which provoked a cascade of liquidations in the crypto market. The fall of the main cryptocurrency is accompanied by significant outflows of funds from Bitcoin ETFs and a general decrease in investors' appetite for risky assets amid macroeconomic uncertainty. This is reported by Bloomberg, writes UNN.
Details
According to Bloomberg, the main reason for the acceleration of the collapse was a change in expectations regarding the monetary policy of the US Federal Reserve. The nomination of Kevin Warsh as Fed chairman, whom the market perceives as a hardliner, intensified investors' fears of a prolonged period of high interest rates. In addition, traders' sentiment worsened due to massive liquidations of long positions, the total amount of which approached $1 billion in the last day.
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Analysts also note that Bitcoin came under pressure due to the strengthening dollar and the outflow of capital into safer assets.
This is the worst-case scenario for Bitcoin: the stability of Treasury bonds makes them attractive, while the volatility of crypto assets deters even institutional players
Situation in the altcoin market
Following Bitcoin, other major cryptocurrencies also recorded significant losses. Ethereum fell to $2,900, and assets such as Solana and Cardano lost 9% to 12% of their value in just one trading session. The Fear & Greed Index fell to 17, indicating a state of extreme fear among market participants.
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Investors are currently awaiting the release of fresh US inflation data, which could either calm the market or trigger a further fall into the $70,000-$75,000 range. Despite the current pessimism, some analysts consider such a correction a "necessary reset" before a possible recovery in the second quarter of 2026.