Bitcoin price drop 2026 — In a tumultuous weekend for digital assets, Bitcoin has crashed below the psychological $80,000 barrier, trading in the $77,000 range as of Sunday morning. This sharp decline marks the cryptocurrency's lowest level in nine months, triggered by a perfect storm of macroeconomic headwinds: the nomination of Kevin Warsh as the next Federal Reserve Chair, a partial U.S. government shutdown, and escalating geopolitical tensions in the Middle East. As panic selling gripped the market, over $1.7 billion in leveraged positions were liquidated within 24 hours.

Kevin Warsh Fed Chair Nomination Sparks "Hawkish" Sell-Off

The primary catalyst for the sudden crypto market crash today was President Donald Trump’s official nomination of Kevin Warsh to replace Jerome Powell as Federal Reserve Chair on Friday, January 30. While Warsh has previously expressed support for Bitcoin’s underlying technology, Wall Street views him as a monetary hardliner.

Warsh’s reputation for advocating strictly positive real interest rates and a smaller central bank balance sheet has sent chills through risk-asset markets. Investors fear that under a Warsh-led Fed, the era of "easy money" and ample liquidity—which historically fuels Bitcoin rallies—could be coming to an abrupt end. "The market is pricing in a significant shift in Federal Reserve monetary policy crypto strategies," notes financial analyst Markus Thielen. "Warsh represents a return to discipline that is fundamentally bearish for speculative assets in the short term."

US Government Shutdown Impact on Markets

Compounding the bearish sentiment is the partial U.S. government shutdown that began at midnight on January 31, 2026. The lapse in funding occurred after the House failed to reconvene for a vote on a bipartisan stopgap bill, leaving federal operations in limbo over the weekend.

While markets were closed during the initial shutdown, the US government shutdown impact on markets became immediately visible in 24/7 crypto trading. Uncertainty regarding the duration of the standoff has driven investors toward cash and defensive positions. With regulatory bodies like the SEC operating with a skeleton crew, fears of delayed approvals for new crypto financial products are further dampening sentiment. If the House does not pass the funding bill when it reconvenes on Monday, February 2, analysts predict further volatility across both equities and digital assets.

Geopolitical Tensions Escalate in the Middle East

Adding fuel to the fire are reports of a significant explosion at Iran's Bandar Abbas port late Saturday, a critical hub for global oil shipments. The incident has spiked fears of a wider conflict in the region, causing a knee-jerk "risk-off" reaction among global investors. While oil prices surged, Bitcoin—often touted as "digital gold"—failed to act as a safe haven, instead correlating tightly with tech stocks and plunging alongside other high-risk investments.

BTC Below 80k Analysis: Technical Breakdown

From a technical perspective, the BTC below 80k analysis paints a grim picture for short-term bulls. The $80,000 level had served as a strong support zone since late last year. Breaking this floor has triggered a cascade of automated sell orders and margin calls.

Data from CoinGlass reveals that long positions accounted for nearly 93% of the $1.7 billion in liquidations this weekend. Bitcoin is now testing support at $77,500. If this level fails to hold, technical indicators suggest a potential slide toward the $74,000 region, a price not seen since April 2025. "The failure to reclaim $82,000 immediately after the Warsh announcement was the first warning sign," explains a crypto strategist from 10x Research. "Now that we are below $80k, the market is in 'no man's land' until we see clarity on the government funding bill."

Crypto News February 2026: What Investors Should Watch

As we move further into crypto news February 2026, all eyes are on Washington. The immediate direction of the market hinges on two key events this week: the resolution of the government shutdown on Monday and any further comments from Kevin Warsh regarding his monetary policy roadmap.

For now, caution is the watchword. Institutional outflows from spot Bitcoin ETFs have accelerated, with over $800 million exiting the funds on Friday alone. Until the macroeconomic picture stabilizes, Bitcoin and the broader cryptocurrency market are likely to remain under intense pressure, trapped between hawkish monetary expectations and political gridlock.