New York, Feb 3, 2026, 17:10 (EST) — Trading continues after hours.
Bitcoin dropped Tuesday, slipping below $76,000 during late U.S. trading. The token last traded around $75,799, down roughly 3.7%, after moving between $72,971 and $79,041. Ether also declined, falling 3.8%.
The move follows a wave of forced selling. Data provider CoinGlass reported $2.56 billion in bitcoin positions liquidated over recent days—traders forced to close out as crypto fell alongside other risk assets. Adam McCarthy at Kaiko noted people were “taking a step back” to rethink risk approaches. Bitfinex analysts highlighted thin weekend liquidity and a faltering AI trade after Microsoft’s Azure growth barely beat expectations. Jim Ferraioli from Schwab Center for Financial Research warned the next shock might come from “outside forces.” Meanwhile, David Morrison at Trade Nation said investors were just waiting for an excuse to ease off. (Reuters)
Rates remain a key factor. Investors are betting on a steeper Treasury yield curve—the spread between short- and long-term yields—if Donald Trump’s pick for Fed chair, Kevin Warsh, follows through on plans to reduce the Fed’s bond holdings. Eric Kuby of North Star Investment Management said a smaller balance sheet would produce a curve “more normally positively sloped.” (Reuters)
Fed Governor Stephen Miran doubled down Tuesday on the call for rate cuts, telling Fox Business Network he expects “a little bit more than a point of interest rate cuts over the course of the year.” He said policy remains too tight despite inflation running above target. (Reuters)
Policy risk remains a factor. A White House meeting on Monday couldn’t break the deadlock between banks and crypto firms over digital-asset rules. The main sticking point: whether stablecoins — tokens pegged to a fixed value, usually one U.S. dollar — should be allowed to offer interest-like rewards. The American Bankers Association, Independent Community Bankers of America, the Blockchain Association, and The Digital Chamber were all present. Kush Desai called the talks “productive,” but the disagreement lingers. (Reuters)
In Washington, Trump on Tuesday signed a spending bill ending a four-day partial government shutdown. The deal restored funding for the U.S. Department of Labor and several other agencies. It also extends funding for the Department of Homeland Security through Feb. 13. (Reuters)
The shutdown has already disrupted the U.S. data calendar. On Monday, the U.S. Bureau of Labor Statistics announced it would postpone the January employment report, pushing it back until government funding is restored. December’s JOLTS job-openings report will also face delays. Former BLS Commissioner Erica Groshen emphasized the agency’s focus on maintaining “quality,” despite staffing shortages and vacant leadership positions. (Reuters)
Crypto traders are increasingly viewing the market as a high-beta play on financial conditions. It thrives on easy money but reacts sharply to even minor changes in rates or liquidity expectations.
Leverage that fuels rallies can just as quickly intensify sell-offs. Should yields climb further or a fresh policy shock strike thin liquidity, the market’s next drop could be sharp and sudden.
Inflation takes center stage next. The Labor Department will release January’s Consumer Price Index on Feb. 11 at 8:30 a.m. ET. Traders will be keen to see if it shifts expectations around Fed rate cuts — especially with the delayed jobs report still pending. (Bls)
