Bitcoin Price Drops to $81K as Trump's Fed Pick Rattles Market

Bitcoin has fallen sharply in the last day, with it currently settling around $82,000 after touching a low of $81,000 yesterday. The cryptocurrency dropped from $84,000 the previous day and stands well below the $96,000 level it held just two weeks ago in mid-January. This move seems to be a combination of renewed macroeconomic concerns and heavy forced selling across the market.

The primary catalyst appears to be President Donald Trump’s nomination of Kevin Warsh to serve as the next Federal Reserve Chair. Warsh, a former Fed governor, has previously expressed skepticism about aggressive quantitative easing and private cryptocurrency initiatives while showing support for central bank digital currencies (CBDCs). The selection may be a signal that monetary policy could remain tighter for longer than many had anticipated following the recent election cycle.

Liquidations and Technical Pressure Intensify Sell-Off

A wave of liquidations has added significant downward momentum to Bitcoin’s price action. More than $1.8 billion in cryptocurrency positions were wiped out in a single 24-hour period, including roughly $597 million in Bitcoin long positions alone. Open interest across futures contracts has declined 31% since October, indicating broad deleveraging among leveraged traders.

This forced selling has been exacerbated by thinning liquidity in the spot market. Bitcoin’s 24-hour turnover ratio recently reached 4.57%, a level that can amplify price swings when large positions are closed. Glassnode data also shows long-term holders have been distributing approximately 12,000 Bitcoin per day in recent weeks, adding steady supply pressure to an already fragile market.

Exchange-traded fund flows have reflected the same cautious sentiment. Bitcoin spot ETFs recorded outflows totaling $817 million this week, marking a clear shift away from the steady inflows seen through much of the prior rally. Investors appear to be rotating toward safer assets as they await clarity on the Federal Reserve’s path forward under new leadership.

The coming days will be critical for determining whether the current decline represents a healthy correction within a longer uptrend or the start of a deeper pullback. Upcoming Federal Reserve confirmation hearings scheduled for May 2026 and the February 2 jobs report will provide important clues about the timing of potential rate adjustments. Until those events unfold, volatility is likely to remain elevated as the market digests both policy uncertainty and the lingering effects of this week’s liquidation cascade.