January 31, 2026 – The cryptocurrency market is reeling today after Bitcoin (BTC) shattered critical support levels, plunging over 7% to hit an intraday low of $78,159. The dramatic Bitcoin price crash 2026 marks the asset's lowest valuation in nearly a year, wiping out months of accumulation in a matter of hours. This sharp correction has been fueled by a "perfect storm" of macroeconomic shocks: the nomination of Kevin Warsh as the next Federal Reserve Chair and record-breaking Bitcoin ETF outflows in January.
Kevin Warsh Fed Chair Nomination Rattles Crypto Markets
The primary catalyst for today's selloff is the confirmation that President Trump has nominated former Fed Governor Kevin Warsh to replace Jerome Powell when his term expires in May 2026. While Warsh has historically made pro-crypto comments—famously calling Bitcoin a "sustainable store of value like gold"—markets are reacting violently to his hawkish stance on monetary policy.
Warsh is a known critic of the "Fed Put" and has advocated for a "valuation-over-liquidity" framework. Investors fear this shift signals the end of the easy-money era that risk assets have thrived on. "The market is repricing the risk of a tighter Fed balance sheet," noted a senior analyst at Cryptovot market news. "Warsh might like Bitcoin theoretically, but his policy approach could drain the global liquidity that fuels crypto rallies."
Bitcoin ETF Outflows January Hit Record Highs
Institutional confidence appears to be fracturing alongside retail sentiment. Data from January 29 revealed a massive exodus from spot Bitcoin products, with Bitcoin ETF outflows January reaching a staggering $817.8 million in a single day—the largest daily redemption event since their launch.
BlackRock’s iShares Bitcoin Trust (IBIT) led the retreat, signaling that even the staunchest institutional holders are de-risking. The total net outflows for January have now surpassed $1.1 billion, exacerbating the selling pressure. This institutional capitulation has created a liquidity vacuum, allowing prices to freefall through the psychological BTC support levels 80k without significant resistance.
$1.75 Billion Crypto Market Liquidation Today
The price collapse triggered a brutal cascade of forced selling. On-chain data confirms a massive crypto market liquidation today, with over $1.75 billion in leveraged long positions wiped out in the last 24 hours. As Bitcoin breached the $80,000 floor, stop-loss orders were triggered en masse, accelerating the descent to $78,159.
"We are seeing a classic liquidation cascade," explained a derivatives trader. "Traders were levered up expecting a bounce at $82,000. When that broke, the floodgates opened." The crypto bear market 2026 fears are now palpable, with the Fear & Greed Index dropping to 16 (Extreme Fear).
Technical Analysis: BTC Support Levels and What's Next
Technically, the breakdown below $80,000 is a significant bearish development. This level had served as a fortress for bulls throughout late 2025. With this support gone, analysts are eyeing the next major demand zones. The $74,000 level is the immediate target, followed by the $69,000 cycle high from previous years.
If the rotation into safe-haven assets like gold continues, Bitcoin could face a prolonged consolidation period. However, some contrarian investors see this as a generational buying opportunity, arguing that Warsh's long-term view on digital assets will eventually outweigh the short-term liquidity shock.
For now, all eyes remain on the ETF flows and the Senate confirmation hearings for Kevin Warsh. Volatility is expected to remain high as the market digests this regime change at the Federal Reserve.
