This marks a 7% drop within 24 hours and a staggering 12% slide over the past week, taking Bitcoin to its lowest level in nearly a year. Ethereum fell even more sharply, losing 10% in a day and 18% in a week. Numerous altcoins recorded double-digit declines, intensifying a market-wide rout.

Market-wide liquidation and weakening capital flows

Over the past few days, billions of dollars in crypto contracts have been liquidated. Bitcoin’s total market capitalization has dropped to an estimated $1.5–1.6 trillion, while the broader digital asset market now hovers between $2.6–2.7 trillion.

Analysts cite weakening capital inflows and persistent ETF outflows as key drivers of the sell-off. Spot Bitcoin ETFs have now seen three consecutive months of net withdrawals, with January 29 alone witnessing $800 million in capital flight.

Simultaneously, rising supply pressure is compounding the drop. Blockchain data firm Glassnode reports that miners are actively moving Bitcoin onto exchanges, a sign of selling intent.

Macroeconomic pressures and a hawkish Fed nominee

The strengthening US dollar has added more pressure on Bitcoin, particularly after President Donald Trump announced Kevin Warsh as his pick to succeed Jerome Powell as Federal Reserve Chair.

Warsh, known for his hawkish stance and aversion to monetary easing, could signal a less crypto-friendly macro environment if confirmed.

Quantum computing and long-term risks

Beyond short-term macro factors, fears around future technological risks are also resurfacing. Bitcoin relies on ECDSA encryption, which could potentially be compromised by advanced quantum computing.

Though the threat is not yet imminent - quantum machines are still far from the necessary capability - it has stirred speculative concerns. The Bitcoin community is already exploring cryptographic upgrades, but this narrative alone could accelerate sell pressure.

Testing critical support zones

Technically, Bitcoin is now testing the crucial $76,000 level - the average purchase price for the cryptocurrency held by Strategy™, the world’s largest corporate holder of Bitcoin. If BTC falls below this support, sentiment may turn even more bearish.

According to market analysts, Bitcoin needs to reclaim the $82,500 mark to avoid activating more sell triggers. Failure to do so could send it spiraling toward $66,000.

A possible turning point - or further plunge

Despite the drop, Bitcoin's decline has been less severe than that of gold and silver in recent sessions. Some signals suggest new investors are entering the market, potentially offsetting capital outflows from large-scale holders.

The Crypto Fear & Greed Index has dropped to extreme fear territory, plunging to 14 points - often considered a contrarian buying signal.

Polymarket betting data reveals 63% of participants believe Bitcoin will hit $100,000 sometime in 2026. However, only half expect it to cross $110,000, reflecting tempered expectations for explosive gains.

The coming weeks could be pivotal. Much hinges on whether Warsh is officially appointed and how the Fed's policy direction shifts. Additionally, investor attention remains fixed on whether capital continues flowing into US equities or returns to safe havens like gold - or back into digital assets.

Manh Ha