Bitcoin and Ethereum prices have plunged sharply today, with Bitcoin breaking below the critical $89,000 support level as global markets react to the historic U.S. Supreme Court hearing on Federal Reserve independence.

The sudden crypto market crash, which has wiped out over $1 billion in trader positions in the last 24 hours, comes as oral arguments begin in Trump v. Cook—a landmark case that could redefine the President's authority to fire Federal Reserve governors. The constitutional showdown has sparked fears of political interference in monetary policy, triggering a massive risk-off wave across financial markets.

Bitcoin Price Crash 2026: Market Reacts to "Unitary Executive" Fears

Bitcoin (BTC) fell more than 4% in early trading Wednesday, slipping to an intraday low of $88,450. This marks a significant reversal from just a week ago, when the asset was trading comfortably above $97,000. The sell-off was mirrored by Ethereum, which plummeted over 7% to trade near $2,850, erasing gains made earlier in the month.

The catalyst for this Bitcoin price crash 2026 is the Supreme Court's review of President Trump's attempt to remove Federal Reserve Governor Lisa Cook "for cause." While the administration cites specific allegations regarding mortgage applications, legal experts and Wall Street analysts view the case as a proxy war for control over the central bank. If the Court rules in favor of the President, utilizing the controversial "unitary executive theory," investors fear that Fed Chair Jerome Powell could be the next target, effectively ending the Fed's century-long independence.

"The market hates uncertainty, and this is the ultimate uncertainty," said a senior analyst at a major crypto hedge fund. "If the President can fire Fed governors at will, the predictability of U.S. monetary policy goes out the window. Crypto is front-running that chaos."

Record Crypto ETF Outflows January 2026

Institutional investors have responded to the political volatility by fleeing risk assets at a record pace. Data from SoSoValue shows that U.S. spot Bitcoin and Ethereum ETFs recorded a combined $713 million outflow on Tuesday alone, marking one of the worst days for the products since their inception.

Crypto ETF outflows January 2026 breakdown:

  • Bitcoin ETFs: $483.4 million in net outflows. Grayscale's GBTC and Fidelity's FBTC led the exodus, shedding $160.8 million and $152 million respectively.
  • Ethereum ETFs: $230 million in net outflows, ending a five-day streak of positive flows. BlackRock’s ETHA fund saw over $92 million exit in a single session.

This massive liquidity drain suggests that institutions are "derisking" ahead of the Supreme Court's decision. Unlike retail-driven panic, these outflows represent strategic withdrawals by asset managers wary of the macro market volatility crypto assets are currently facing.

Trump vs Jerome Powell Case: A Constitutional Showdown

While the case on the docket is officially Trump v. Cook, the subtext is widely understood to be the Trump vs Jerome Powell case for control of the dollar. Tensions escalated last weekend when it was revealed that the Department of Justice had served grand jury subpoenas to the Federal Reserve regarding Chair Powell's testimony to the Senate Banking Committee. This direct confrontation has rattled global investors, who view the Fed's autonomy as a bedrock of financial stability.

Legal scholars argue that if the Supreme Court validates the administration's removal power, it would pave the way for an executive takeover of independent agencies. Harvard Law Professor Daniel Tarullo recently noted that this case is "forcing the Court to decide just how far it is going to push its unitary executive theory," calling it potentially the most important decision of the Roberts Court.

Liquidations Top $1 Billion as BTC Breaks Support

The rapid descent has devastated leveraged traders. BTC below 89000 news triggered a cascade of long liquidations totaling over $1 billion across the crypto ecosystem. Coinglass data indicates that over 180,000 traders were liquidated in the last 24 hours, with the largest single liquidation order happening on Binance for a value of $12 million.

Technically, the loss of the $90,000 psychological support is a bearish signal. Analysts are now eyeing the $83,000–$84,000 range as the next major defense line. If Ethereum price drop today continues, ETH could retest the $2,600 support zone.

What's Next for Crypto Markets?

As oral arguments proceed today, volatility is expected to remain extreme. Traders are glued to the Supreme Court feeds for any indication of which way the Justices are leaning. A ruling is not expected immediately, but the questioning from the bench could signal the Court's appetite for overturning the 1935 Humphrey's Executor precedent that currently protects independent agency heads.

For now, caution is the watchword. With macro market volatility crypto correlations tightening, Bitcoin's fate in the short term is inextricably linked to the gavel in Washington.