NEW YORK, Feb 4, 2026, 06:10 EST — Premarket action underway.
- Bitcoin slipped roughly 3% to $75,782 during early New York trading, fluctuating between $72,971 and $78,345 over the past 24 hours
- U.S. spot bitcoin ETFs saw net outflows of $272 million on Feb. 3, reversing the $561.8 million inflow recorded the previous day
- Friday’s U.S. jobs report has traders on edge, looking for clues on where rates and the dollar might head next
Bitcoin dropped nearly 3% to $75,782 on Wednesday, wiping out earlier gains after a volatile day that swung between $72,971 and $78,345.
The shift is significant as a major demand driver shows signs of faltering once more. U.S.-listed spot bitcoin ETFs posted $272 million in net outflows Tuesday, erasing Monday’s $561.8 million net inflow, Farside Investors data revealed. BlackRock’s IBIT attracted $60 million, whereas Fidelity’s FBTC experienced $148.7 million in withdrawals. (Farside)
Crypto has felt the impact of a wider shift in rate and liquidity expectations since President Donald Trump tapped former Fed governor Kevin Warsh to head the Federal Reserve. Manuel Villegas Franceschi of Julius Baer’s next generation research team called the market structure “weakened strongly since October,” marking Warsh’s nomination as a key moment triggering the downturn. (Reuters)
Tuesday’s selloff showed how fast risk is being shed. Bitcoin dropped to its lowest level since November 2024, slipping about 4.6% to $74,880.91 at one stage. Ether took a bigger hit, falling nearly 6% to close to $2,200. (Reuters)
Leverage has been driving the volatility higher. Bitcoin investors liquidated $2.56 billion over the past few days, according to CoinGlass, as the crypto selloff mirrored broader declines in risk assets like stocks and precious metals. “People (are) taking a step back” to reassess risk frameworks, said Adam McCarthy, senior research analyst at Kaiko, a digital market data provider. Jim Ferraioli, director of crypto research and strategy at Charles Schwab’s Schwab Center for Financial Research, pointed to “the biggest risk to prices at these levels” coming from external factors, including labor market shifts or a setback to the AI trade. (Reuters)
Liquidations occur when leveraged positions are forcibly closed as prices move against traders. This process can accelerate a downturn, with selling driven by margin calls instead of new assessments of value.
Macro rates are back under scrutiny, not just the Fed’s benchmark rate. Investors are betting on higher long-term Treasury yields as markets price in a Warsh-led Fed cutting rates while shrinking its balance sheet—a move that can actually tighten financial conditions despite lower borrowing costs. “They’re going in opposite directions,” said Jim Barnes, director of fixed income at Bryn Mawr Trust. (Reuters)
In Washington, the confirmation process has turned into a fresh wildcard. On Tuesday, Democratic senators pushed to postpone the nomination hearings for Warsh, injecting more uncertainty into both the timeline and the ongoing political battle over Fed independence. (Reuters)
The next shock might come from a data release. A stronger dollar or higher yields could push bitcoin back toward its recent lows, while weaker numbers might ease the strain on the trade — at least for a while.
The next key date for investors is the U.S. employment report for January, set for release on Friday at 8:30 a.m. ET. This report frequently shifts expectations around interest rates and liquidity. (Bls)
