NEW YORK, Jan 31, 2026, 14:50 EST
- Bitcoin fell 6.53% to $78,719.63 on Saturday, slipping under the $80,000 mark
- Ether dropped 11.76%, settling at $2,387.77 amid broad declines in key tokens
- Thin weekend liquidity compounded by renewed doubts over U.S. monetary policy pushed pressure higher
Bitcoin dropped below $80,000 on Saturday, deepening its recent slide. By 12:48 p.m. ET, the cryptocurrency had fallen 6.53% to $78,719.63. Ether also took a hit, tumbling 11.76% to $2,387.77.
Bitcoin slipped back to levels not seen since April 2025, as thin weekend liquidity combined with weak buying interest to deepen the drop. The wider crypto market lost roughly $111 billion in value within 24 hours, according to CoinGecko. Ether and Solana both suffered double-digit declines. Meanwhile, spot bitcoin exchange-traded funds — stock-market vehicles holding the token — continued to experience steady outflows. Investors remained defensive, concentrating flows into metals and cash.
Traders flagged renewed concerns that a new Federal Reserve chief might start draining liquidity from the market. Damien Boey, portfolio strategist at Wilson Asset Management, described the talk of shrinking the Fed’s balance sheet as “pulling the rug out from underneath” assets buoyed by easy money. Sean Dawson, head of research at Derive.xyz, pointed to “fears around AI exuberance” as a “big contributor” after Microsoft shares dropped 10%, rattling risk appetite. Reuters
Donald Trump has put forward Kevin Warsh as Jerome Powell’s replacement at the Fed, though it’s still unclear how much policy will shift under his watch. Heather Long from Navy Federal Credit Union described Warsh as “a pragmatist,” suggesting he won’t risk market confidence with unwarranted rate cuts. Raphael Bostic, who’s leaving the Fed, weighed in too, saying the central bank’s balance sheet “is about right,” highlighting how institutional inertia could slow any big changes. Reuters
Bitcoin slid to $81,104 on Friday, marking its lowest level since Nov. 21, as the dollar gained ground following Warsh’s selection by Trump for the position. Despite last year’s sharp drop, cryptocurrencies have floundered, even while gold and stocks enjoyed strong rallies and investors hoped for a fresh wave of inflows and looser regulations under the Trump administration.
The Fed’s balance sheet represents the bonds it owns; a shrinkage means it’s pulling cash from the system. Traders often refer to “liquidity” to gauge how smoothly assets can be bought or sold without disrupting prices.
Bitcoin is behaving more like a leveraged gamble than a safe haven at the moment. The $80,000 level stands as the key benchmark, with weekend swings often pushing prices well beyond that point in either direction.
Some investors continue to tout bitcoin as a hedge against loose government money policies and currency devaluation. This week, however, it failed to attract that kind of safe-haven demand.
But things can shift fast. Warsh still faces the confirmation process, with lawmakers from both sides voicing concerns over potential political influence on the Fed. If that uncertainty lingers—or if markets start preparing for tighter liquidity—crypto may remain stuck under pressure.
Bitcoin never stops trading, but the real challenge lies ahead—when bigger money flows in and volumes pick up. For now, the market is stuck reacting to a familiar trio: interest rates, the dollar, and ongoing withdrawals from crypto funds.
