SINGAPORE, Feb 5, 2026, 23:48 SGT
- Ether dropped roughly 9%, dipping below the key $2,000 mark to trade near $1,947.
- Traders reacted with fresh risk-off moves after Donald Trump announced Kevin Warsh as his pick for the next Fed chair.
- Analysts pointed to heavy liquidations and ETF outflows as the sell-off quickened.
Ether dipped under $2,000 on Thursday, dropping roughly 9% to $1,946.65. Bitcoin also plunged, sliding about 9.5% to near $67,029 amid a broad sell-off in digital assets.
The recent sell-off is linked to worries that if Warsh takes the helm at the Federal Reserve, he’ll tighten financial conditions by shrinking the Fed’s balance sheet. “The market fears a hawk with him,” said Manuel Villegas Franceschi of Julius Baer. CoinGecko data highlights that since peaking in early October, the global crypto market has shed nearly $1.9 trillion. South China Morning Post
Money is flowing out of crypto-linked funds, and it’s hitting prices hard. Deutsche Bank’s Marion Laboure pointed to “institutional outflows and thinning liquidity.” Han Tan from Bybit Learn said “crypto bears are firmly in control,” according to an Investing.com report, which also noted U.S. spot bitcoin ETFs saw over $3 billion in outflows in January.
The market shift is starting to look less like a simple token hiccup and more like a balance-sheet shakeup. Data compiled by Bloomberg and cited by The Business Times revealed that over $800 million exited U.S.-listed bitcoin ETFs in just two sessions following Monday’s inflows. At the same time, Coinglass reported $722 million worth of bullish positions across tokens were liquidated within 24 hours. “Price action is now being driven more by balance-sheet mechanics than narrative flow,” said SynFutures COO Wenny Cai. The Business Times
Some technicians view the recent drop not as a clear break but as a test of longer-term support lines. In an analysis on Investing.com published Wednesday, Dr. Arnout ter Schure pointed out that ether was hovering near a long-term downtrend line at about $2,150. Its daily RSI30—a momentum indicator—had fallen to 32, a point he noted has frequently signaled “low-risk, high-reward” buying opportunities for those employing dollar-cost averaging. Investing.com
Some are watching closely what might unfold if the sell-off continues and leverage pressures mount again. IG market analyst Axel Rudolph pointed out that ether has broken below the $2,141-$2,096 support range. He cautioned that risk-off rotations and forced liquidations could drive prices down quicker than spot selling alone. IG
Sherwood News reported that ether plunged to a nine-month low, wiping out over $100 billion in market value in just a week, dragged down by broader market weakness that also weighed on bitcoin. Bernstein analyst Gautam Chhugani suggested bitcoin might still “bottom out” near the $60,000 mark. sherwood.news
A post from Binance Square making the rounds among traders highlighted bearish chart setups alongside on-chain metrics like the market value-to-realized value (MVRV) ratio. This ratio pits a token’s market cap against the total cost basis of holders to signal if investors are currently underwater. Binance
Jefferies strategist Mohit Kumar cautioned miners might encounter forced liquidations if prices drop further, potentially sparking a “vicious cycle.” On the flip side, deeply oversold technical signals might spark quick, sharp rebounds as sellers retreat. Reuters
Traders are keeping an eye on whether risk appetite resurfaces in tech and if fund flows hold steady—two key signals that have lately driven ether’s daily moves.
