Crypto markets came under intense pressure over the weekend as bitcoin broke below the $80,000 support level following confirmation that Kevin Warsh will take over as Federal Reserve Chair. The announcement accelerated an already fragile market backdrop, sparking a fresh wave of deleveraging across major digital assets.

Bitcoin briefly fell to around $74,500, while ether dropped below $2,170. The move triggered more than $2.5 billion in liquidations of leveraged long positions, amplifying downside momentum. The sell-off adds to mounting pressure from persistent spot ETF outflows, with bitcoin now on track for its fourth consecutive monthly decline.

The risk aversion extended beyond crypto. According to QCP’s Feb. 2 market note, U.S. equities weakened, while traditional safe havens such as gold and silver also pulled back after reaching overbought levels.

Markets appear to be reassessing the policy outlook under a Warsh-led Fed, with growing expectations that interest rate normalization or even renewed tightening could arrive sooner than previously anticipated. Higher margin requirements on futures exchanges further accelerated the unwind of leveraged positions in metals and crypto alike.

Despite the volatility, bitcoin has so far stabilized above the $75,000 level, which aligns with its 2025 cycle lows. Still, price action remains fragile. Momentum indicators continue to point lower, and upside is capped near recent resistance. A sustained break below $74,000 could open the door to a deeper retracement toward 2024 trading ranges. Conversely, a reclaim of $80,000 would likely ease volatility and help normalize options positioning.

Read more: Bitcoin’s $74K Floor: Will the Foundation Hold or Crack Under Pressure?

Looking ahead, investors will closely monitor whether institutional accumulation returns, particularly near key cost-basis levels around the mid-$70,000s. Geopolitical developments and early signals from Chair-designate Warsh will also be critical, as any shift in tone on monetary policy could play a decisive role in shaping crypto market direction for the remainder of the quarter.

• Why did bitcoin and crypto sell off sharply?
  Markets reacted to Kevin Warsh’s confirmation as Fed Chair, raising fears of tighter monetary policy.
• How deep was the crypto market drop?
  Bitcoin fell below $80K to $74.5K, triggering over $2.5 billion in leveraged liquidations.
• Did the selloff spill into other markets?
  Yes, U.S. stocks weakened and gold and silver also pulled back amid broad risk aversion.
• What levels matter for Bitcoin now?
  Support sits near $74K, while reclaiming $80K would help stabilize sentiment.

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