The crash in the crypto market grew faster than ever during the weekend, and it shook the industry, with Bitcoin (BTC) falling below the essential psychological support level of 80,000 dollars for the first time in months.
The bitcoin was trading at 78,678 as of Sunday, a strong decrease compared to its all-time high of 126,300. The negative force caused the market to fall and the overall market capitalization has gone down by more than 5.80 per cent in the past 24 hours to be at $2.67 trillion.
Ether (ETH) dropped to $2,400, and Binance Coin (BNB) dropped to $770. Here are the four best causes of the current crypto market crash.
1. Trump Nominates Kevin Warsh as Fed Chair
One of the primary catalysts for the crash is Donald Trump’s nomination of Kevin Warsh to replace Jerome Powell as the Federal Reserve Chair when his term ends in May.
Although Warsh has just expressed his views in favor of the crypto industry, analysts are worried it was just a strategy of getting the nomination. In the past, Warsh is a known inflation hawk.
The Fear: Warsh voted against interest rate reductions and quantitative easing (QE) in 2011.
The Effect: Markets think that Warsh will keep interest rates high and counter money-printing policies (QE), which usually suck the liquidity out of risk-on assets such as Bitcoin.
2. Soaring Liquidations ($2.5 Billion Wiped Out)
The crash was fueled by a massive cascade of liquidations. Data from CoinGlass reveals that futures open interest dropped by 10% to $113 billion.
In the last 24 hours alone, total liquidations jumped by 348% to over $2.5 billion, marking the biggest single-day wipeout in months.
- Ethereum: $1.1 billion liquidated.
- Bitcoin: $785 million liquidated.
- Solana: $197 million liquidated.
This event evoked memories of October 10, when $20 billion was wiped out following tariff threats on China.
<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”>🚨MASSIVE CRASH IN CRYPTO MARKET.<br><br>ALMOST $250,000,000,000 wiped out from the crypto market cap today.<br><br>Over $12 Trillion Disappeared from Global Markets this week.<br><br>Bitcoin CRASHED -13% <br>Ethereum CRASHED -20% <br>Gold CRASHED -13% <br>Silver CRASHED -37% <br>Dollar CRASHED -2%… <a href=”https://t.co/2p4FQSvv7t”>pic.twitter.com/2p4FQSvv7t</a></p>— Megh Updates 🚨™ (@MeghUpdates) <a href=”https://twitter.com/MeghUpdates/status/2017759937527697666?ref_src=twsrc%5Etfw”>February 1, 2026</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>
3. Rising Geopolitical Tensions (US & Iran)
The growing tension between United States and Iran is causing investors to run away with risk assets. Trump is threatening war action after recent demonstrations in Iran.
Oil Prices: The tension has driven Brent crude oil to 70 which has affected the global markets.
Safe Haven Shift: The myth about Bitcoin being a safe haven has been refuted in the course of this crisis.
4. Bearish Technical Indicators
Technical analysis on the weekly chart has signaled this downturn for weeks. Bitcoin formed a rising wedge pattern and a bearish flag pattern.
Crucially, BTC has moved below the 50-week Exponential Moving Average (EMA) and the Supertrend indicator. These technical breakdowns suggest that further downside may be on the horizon.
Crypto Market Crash Summary
| Metric | Details |
| Bitcoin Price | $78,678 (Down from ATH $126k) |
| Market Cap Drop | 5.80% (Current: $2.67 Trillion) |
| Total Liquidations | $2.5 Billion (24 Hours) |
| Main Driver | Kevin Warsh Nomination (Fed Chair) |
| Geopolitics | US-Iran Tensions |
