A massive blow to the risk markets left crypto with heavy losses over the weekend. Reports say about $250 billion was wiped off the combined market value as investors retreated. Some sales are hitting Bitcoin hard. Some say it spread to tech stocks at the same time.
Bitcoin Faces Confidence Test
Bitcoin has been searching for a base. As of today, it has dropped below $80,000 and is down nearly 40% from its 2025 high of over $126,000.
Traders and on-chain trackers are showing weak buying pressure. Retail interest is cool. Large outflows from existing ETFs have been recorded, and momentum has been lost across several indices.
Support near $73,000–$75,000 is now the zone most are watching, while some market participants expect multiple stops before a calm return.
Markets Move Together
Analysts noted that the shares of Software-as-a-Service and Bitcoin fell in tandem. That’s important because both depend heavily on expectations about future growth; they tend to suffer first when the money takes hold.
Gold was rising at the same time, and some traders argued that the move to the bull led less money to riskier bets. When fewer dollars move freely between banks, hedge funds lose power quickly and riskier positions suffer more.
– Raoul Pal (@RaoulGMI) February 1, 2026
Source: LSEG Datastream/Global Macro Investor
Macro Liquidity, Not a Crypto-Only Problem
According to Raoul Pal, founder and CEO of Global Macro Investor. The squeeze came from a small pool of US dollars rather than a unique crypto problem.
The mechanics they point to are technical: Restructuring of the Treasury’s General Account, higher funding costs, and a smaller buffer in the Reverse Repo Facility that used to soak up more money.
“The gold rally absorbed all the small payments in the system that would have gone into BTC and SaaS,” Pal said.
“There was not enough money to finance all these goods, so the most dangerous ones were affected,” he added.
Those shifts can quietly eliminate paying even when not a single subject complains of a problem. Government financial interference is also blamed for creating tension in the system. When liquidity is driven out, assets tied to future cash outflows take a hit.
Source: LSEG Datastream/Global Macro Investor
Different Voices on Fed Appointments
Reports say that the appointment of Kevin Warsh to head the Federal Reserve has added to the atmosphere of concern. Some market experts are worried that it will not reduce prices as quickly as expected.
Some analysts say the sentiment stems from the idea that the rate cut may be delayed. But Raoul Pal pushed back, saying U.S. President Donald Trump’s team would steer policy toward simplistic levels and that Warsh would follow that playbook.
Views vary. That uncertainty has left many traders reluctant to invest new money in extended trades.
A Vigilant But Never Losing Hope Close
At the time of writing, price action looks fragile and rallies short-lived. However, some analysts expect the withdrawal of funds to ease and that funds will return once funding conditions normalize.
The coming weeks will show if buyers are coming back from the low-$70k range or if sales are getting deeper. Reports note that risk appetite tends to return before the headlines change, but only if the dollars are flowing again.
Featured image from Unsplash, chart from TradingView
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