• Bitcoin plunges to its lowest level since November 2024, triggering a broad crypto selloff and $775 million in liquidations.
  • Crypto-related stocks like Coinbase (COIN), Riot, Marathon, and MicroStrategy (MSTR) drop 5-7% premarket amid institutional outflows from Bitcoin ETFs.
  • The selloff intensifies after Donald Trump nominates Kevin Warsh as Fed chair, raising fears of tighter liquidity and boosting the U.S. Dollar Index above 97.5.

Bitcoin dropped 3.5% to test $70,052 on February 5, 2026—its lowest since November 2024—marking the third consecutive session of losses and sparking a sharp decline across the cryptocurrency market. The plunge, which briefly saw Bitcoin fall to about $69,456 before recovering slightly to $71,340 (down 1.5% overall), has wiped out gains from late 2025 and pushed the digital asset nearly 8% lower this week and about 20% year-to-date.

According to people familiar with the matter, the selloff accelerated after former President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair, a move that has stoked expectations of a hawkish pivot toward balance sheet reduction and tighter monetary policy. This has boosted the U.S. Dollar Index (DXY) above 97.5, pressuring risk-sensitive assets like cryptocurrencies. "The hallmarks of capitulation are emerging," said one analyst, who requested anonymity due to the sensitivity of market discussions, pointing to accelerated institutional outflows from Bitcoin ETFs totaling hundreds of millions recently.

Crypto-related stocks bore the brunt of the downturn in premarket trading. Coinbase (COIN), the leading U.S. cryptocurrency exchange, fell 5%, while Bitcoin miners Riot Platforms (RIOT) and Marathon Digital (MARA) dropped around 5-6% each. MicroStrategy (MSTR), the business intelligence firm with substantial Bitcoin holdings, slid 7%. These declines reflect broader market jitters, as leveraged positions faced approximately $775 million in liquidations today, following a $2.2 billion liquidation event on February 1—the largest since October 2025.

Institutional sentiment has soured, with BlackRock-led Bitcoin ETFs seeing $373.8 million in outflows recently, part of a multi-billion dollar exodus since mid-January that has eroded spot bid support. The broader crypto market followed suit: XRP fell 7% to below $1.40, nearing November 2024 lows, and Ethereum dropped to $2,068, testing May 2025 support levels. Dogecoin consolidated near $0.08, its 2024 low, as risk-off sentiment spread.

Market participants are closely watching key technical levels. Bitcoin now risks breaking below $68,000, which aligns with its 200-week exponential moving average—a critical support zone. Some analysts, citing historical precedents like the October 2025 flash crash, warn of potential further declines to $60,000 or even $47,000 if support fails. For Ethereum, the next major support is around $1,760, with XRP potentially facing a drop to $1.25 or lower in ultra-bearish scenarios.

Efforts to gauge the impact on stakeholders reveal mixed reactions. Retail traders faced about 165,000 liquidations, mostly from long positions, while miners are evaluating operational cuts if Bitcoin sustains lower prices. On social media platforms like X, debates rage over whether Warsh's nomination spells prolonged pain for crypto or presents a buying opportunity near key support levels. Attempts to reach representatives from Coinbase and MicroStrategy for comment were unsuccessful at the time of writing.

Looking ahead, the short-term outlook remains bearish unless Bitcoin can rally above key resistance levels. Analysts suggest that a relief rally might materialize if the DXY eases post-Warsh confirmation, but caution that a break below $70,000 could trigger further downside, with some ultra-bearish targets pointing to $52,000 based on Fibonacci retracement levels. The ongoing ETF outflows and political uncertainty continue to cloud the horizon, making this a pivotal moment for crypto markets.

Correction: An earlier version of this article misstated the exact percentage drop for Bitcoin; it has been updated to reflect the 3.5% decline to $70,052.