The cryptocurrency market is reeling from a catastrophic sell-off this Friday, January 30, 2026, as Bitcoin (BTC) plummeted over 6% to strike an intraday low of $81,000. The violent downturn has triggered a widespread crypto market bloodbath, resulting in $1.68 billion in liquidations across major exchanges. The crash comes on the heels of President Donald Trump's announcement nominating Kevin Warsh as the next Federal Reserve Chair, a move that has sent shockwaves through risk assets due to Warsh's reputation for monetary hawkishness.
Kevin Warsh Fed Chair Nominee Sparks Panic
The primary catalyst for the Bitcoin crash today appears to be the sudden confirmation of Kevin Warsh as the Trump administration's pick to replace Jerome Powell. Warsh, a former Fed Governor, is widely viewed by Wall Street as a "hawk" who favors tighter monetary policy and higher interest rates to curb inflation—a stance that historically pressures speculative assets like crypto.
While Warsh has previously stated that "Bitcoin doesn't trouble me" and called it a "policeman for policy," his strict adherence to traditional financial discipline has spooked institutional investors. The market fears that a Warsh-led Fed could signal an end to the liquidity easing that fueled the crypto rally earlier this year. "The market is pricing in a regime change," noted one analyst, as traders rapidly repriced the odds of future rate cuts.
Record Bitcoin Spot ETF Outflows Signal Institutional Fatigue
Compounding the bearish sentiment is a mass exodus from institutional investment vehicles. Data from SoSoValue reveals that Bitcoin spot ETF outflows hit a staggering $817.8 million in a single day on January 29, the largest daily withdrawal since November 2025.
BlackRock’s iShares Bitcoin Trust (IBIT), usually a pillar of stability, led the retreat with over $317 million in net outflows, followed closely by Fidelity's FBTC. This synchronized selling suggests deep institutional fatigue, as major players de-risk their portfolios in anticipation of a tighter macroeconomic environment under Warsh. The sheer scale of these outflows has removed a critical support level for Bitcoin price, accelerating the drop to $81,000.
Crypto Market Liquidations Top $1.68 Billion
The sudden volatility has devastated leveraged traders. Crypto market liquidations surged to $1.68 billion in the last 24 hours, with long positions accounting for nearly 93% of the losses. Over 270,000 traders were liquidated as the Ethereum price drop today mirrored Bitcoin's fall, with ETH sliding over 7% to test key support levels.
This "long squeeze" has forced a cascade of automated sell orders, deepening the correction. The crypto fear and greed index has swiftly pivoted from "Greed" to "Fear," reflecting the rapid shift in sentiment. Traders are now eyeing the $79,000 - $80,000 zone as the next critical line of defense; a break below this could open the door to a prolonged bear phase.
BTC Price Prediction 2026: Analysts Revise Targets
Despite the current gloom, long-term forecasts remain cautiously optimistic, though tempered by the new reality. Following the crash, major banks have adjusted their outlooks. Standard Chartered, which previously forecasted a $300,000 peak, has revised its BTC price prediction 2026 to $150,000 by year-end, citing the changing liquidity landscape.
Conversely, VanEck maintains a bullish long-term thesis, projecting a multi-million dollar valuation by 2050, but warns of volatility in the short term. For now, investors are advised to brace for turbulence as the market digests the implications of a Warsh-led Federal Reserve.
