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The cryptocurrency market faced intensified selling pressure on February 2, 2026, as Bitcoin (BTC) extended its decline below the $80,000 level following President Donald Trump’s January 30 nomination of Kevin Warsh as the next Federal Reserve Chair.
Warsh, a former Fed governor (2006–2011) viewed as hawkish on inflation in his past tenure but aligned with calls for lower rates under Trump, sparked concerns over potential tighter monetary policy once he assumes the role in May (pending Senate confirmation). Markets interpreted the pick as signaling prolonged restrictive conditions, elevated bond yields, and reduced liquidity for risk assets like crypto.
Bitcoin dropped sharply over the weekend and into Monday, falling below $80,000 for the first time since April 2025. It hit lows around $74,500–$74,800 before stabilizing near $76,000–$77,600 (per Yahoo Finance, CoinMetrics, and CoinDesk data), reflecting 5–12% losses in recent sessions. This triggered cascading liquidations, with over $2 billion in positions wiped out since late last week—peaking at around $2.5–$2.56 billion on key days (Coinglass figures), predominantly long bets.
Ethereum (ETH) and altcoins followed, posting steeper declines amid leveraged unwinds and broader risk aversion. The sell-off correlated with weakness in equities, precious metals (gold and silver slumped amid dollar strength), and geopolitical tensions.
Analysts described the reaction as macro-driven and sentiment-fueled, tied to Fed leadership uncertainty rather than crypto-specific issues. Some noted Warsh’s nomination caught traders off guard in thin weekend liquidity, amplifying volatility.
Despite the downturn, observers emphasized that on-chain activity, institutional adoption, and long-term fundamentals remain resilient, framing the move as short-term policy shock rather than structural failure. Traders are monitoring Fed signals, U.S. economic data, and confirmation proceedings for direction, with elevated volatility expected in the near term.
