Bitcoin plunged to a nine-month low amid a broad market selloff driven by macroeconomic and geopolitical uncertainty. The drop, which saw over $1.68 billion in crypto positions liquidated, followed speculation about a new Federal Reserve chair and a U.S. executive order targeting oil trade. Markets showed slight recovery after a late Senate deal to fund the government eased near-term political concerns.
A flurry of macroeconomic and geopolitical developments triggered a broad selloff, sending Bitcoin to its lowest level in nine months. The leading cryptocurrency shed 7.4% over 24 hours, hitting a low near $82,134.
The total crypto market capitalization declined by 6.7%, resulting in $1.68 billion in liquidated positions tracked by Coinglass. Policy shifts in Washington played a central role in the correction, including President Donald Trump’s plan to reveal his next Federal Reserve Chairman nominee.
Sources told Reuters that former Fed Governor Kevin Warsh met with Trump and reportedly “impressed” the President. “Market participants expect the next chair to be Kevin Warsh, a long-time critic of quantitative easing and presumed inflation hawk. This is bearish for Bitcoin in the short term,” investment analyst Lai Yuen from Fisher8 Capital said.
Trump’s executive order declaring a national emergency to impose tariffs over oil sales to Cuba added to headwinds. Combined with concerns over potential U.S. intervention in Iran, this triggered a primary flight to safety, according to Zerocap analyst Emir Ibrahim.
Ongoing conflicts in Iran, the South China Sea, and the Russia-Ukraine war further tempered investors’ risk appetite. Velo data showed a sudden uptick in Bitcoin’s open interest since Wednesday alongside selling pressure.
Options market investors are betting on a short-term crash to the $70,000 to $75,000 range. The 30-day Bitcoin skew hovering at -12% indicates investors are paying a premium for downside protection, stated Sean Dawson, head of research at Derive.
“All in all, I expect a painful start to February,” Dawson explained, noting positive regulatory steps are unlikely to drive prices higher immediately. Bitcoin saw a slight recovery, trading near $82,850 as equity markets also showed signs of recovery in early Asian trading.
This followed eased near-term political uncertainty after Trump endorsed a Senate deal to fund the majority of the Federal Government. The late-night agreement temporarily eased equity selloffs after the crypto market’s major liquidation event.
