Today, February 1, 2026, the cryptocurrency market is experiencing a day of considerable tension. Bitcoin has fallen to the range of $75,000 - $78,000, representing a drop of more than 10% from its recent highs.
Here I explain the main reasons for this "shake-up":
1. The "Federal Reserve Effect" (Fed)
The announcement of Kevin Warsh as Donald Trump's choice to lead the Federal Reserve has greatly strengthened the dollar. Historically, when the dollar rises sharply, risk assets such as cryptocurrencies tend to fall because investors prefer to seek refuge in cash or bonds.
2. Regulatory and Policy Uncertainty
Legislative halt: In the U.S., a key bill regarding the structure of the crypto market got stuck in the Senate after Coinbase withdrew its support. This reignited fears of stricter or disorganized regulation.
Fear of government shutdown: Concerns persist about a potential government shutdown in the U.S., leading to a wave of precautionary selling (the famous "risk-off").
3. Massive Liquidations
When the price started to drop, forced liquidations were triggered. Many investors operate with borrowed money (leverage); as the price falls, their positions are automatically closed, forcing them to sell more and accelerating the decline like a snowball. Today, it is estimated that more than $1,800 million has been liquidated in the market.
4. Competition with Gold and AI
Gold: Gold is nearing $5,000 per ounce, attracting capital from those seeking safety.
AI: The launch of the Chinese model DeepSeek has moved a lot of capital towards technology and artificial intelligence companies, reducing the prominence (and liquidity) of the crypto sector in the short term.
In summary:
This is not a drop due to a technical failure, but a mix of U.S. politics, a strong dollar, and lack of liquidity over the weekend. For many analysts, the $74,500 level is the key support that must hold to avoid a larger drop.
