Intro

Hey Degens,

If you checked your portfolio today and instinctively closed the app… fair.

As of January 31, 2026, Bitcoin has:

• Slid from the low 90Ks to the high 70Ks in a week

• Logged its longest streak of monthly losses since 2019

• Dragged the entire market with it — with majors like ETH, SOL, BNB and even meme coins posting double-digit daily red

And all of this is happening while trad markets… aren’t exactly collapsing.

So:

• What’s actually driving this crash?

• Is this just another mid-cycle flush, or are the “$30K is next” people finally onto something?

• And what does this say about Bitcoin’s “hedge” narrative when macro gets spicy?

Let’s zoom out from the screaming charts and walk through it.

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TL;DR

• Price action: BTC briefly traded around $83.7K earlier today, and then pushed as low as ~$75–78K as selling accelerated. That’s roughly –12–13% on the week, and several majors (ETH, SOL, BNB, meme rotation names) are down 10–20% in 24h.

• Macro trigger #1 – Warsh: After Donald Trump nominated Kevin Warsh as the next Fed chair, the dollar ripped and risk assets sold off. Warsh is seen as an “inflation hawk” who dislikes a bloated Fed balance sheet, which markets interpret as: less easy money, more pressure on risk.

• Macro trigger #2 – War risk: At the same time, traders are suddenly gaming out the chance of a US strike on Iran, potential retaliation, and even a threat to the Strait of Hormuz — i.e., higher oil, higher volatility, less appetite for “high beta internet coins.”

• Flow & leverage:

  • US spot Bitcoin ETFs have booked outflows for three straight months, signaling institutions aren’t stepping in as dip-buyers (for now).

  • In the last 24–48 hours, we’ve seen around $1.6–1.7B in liquidations, mostly longs, with hundreds of thousands of traders wiped.

  • Futures open interest has dropped to roughly $113B, showing leverage is being forced out of the system again.

• Sentiment: The Crypto Fear & Greed Index has slid into the mid-20s (Fear), and social is back to “are we in a bear market / is BTC going to $30K?” mode.

• Narratives:

  • Analyst Benjamin Cowen and others say Bitcoin has already transitioned into a bear market and could ultimately revisit $50K–$30K if classic bear-cycle patterns repeat.

  • Peter Schiff is dunking on BTC again, pointing out that Bitcoin is down ~57% vs gold from its 2021 high when priced in ounces.

• Microstructure backdrop: We’re still living in the shadow of the Oct 10, 2025 “$19B liquidation day”, when over-levered perps + USDe loops + bad timing nuked the market. People like Evgeny Gaevoy and Star Xu are now openly debating how much that event structurally changed crypto’s plumbing.

Main Event

1. What Just Happened?

Let’s anchor the numbers first.

• Earlier today, mainstream coverage had BTC at ~$83.7K, calling out the longest streak of monthly red since 2019.

• As we hit late US/early Asia, crypto-native outlets started printing $75–78K prints, with BTC down around 12–13% week-over-week, and ETH dumping into the high 2.3Ks.

• Total market cap bled to around $2.6–2.7T, with some high-beta names (Worldcoin, Story, Pudgy Penguins, etc.) down 15–20% on the day.

Under the hood:

• Liquidations:

  • Roughly $1.6–1.7B liquidated over 24h, ~90%+ of it long positions betting on continuation.

  • BTC alone saw somewhere between $500–800M in wiped longs depending on venue, with ETH not far behind.

• Open interest:

  • Futures OI has slid to roughly $113B, telling you the system is performing another forced de-leverage — not as extreme as Oct 10’s $19B flush, but the same direction.

If this feels like “we’ve seen this movie before,” it’s because we have:

• Leverage builds up quietly

• Macro throws a brick

• OI unwinds, liquidations cascade

• Social feeds fill with “glitch” conspiracies and doom charts

But the why matters. This time, there are some very specific macro and structural pieces in play.

2. Macro: Warsh, the Dollar, and War Jitters

2.1 Warsh nomination = “less comfy Fed”

After Trump nominated Kevin Warsh to replace Jerome Powell, markets had to suddenly re-price what the next 2–3 years of US monetary policy might look like.

Key points about Warsh:

• He has a long history of criticizing the Fed’s huge balance sheet and the distortion from years of QE.

• He’s been described as an “inflation hawk”, which to markets reads as: more skeptical of loose policy and money-printing.

• At the same time, he’s not a simple “higher forever” guy — he’s also talked about lowering short-term rates when productivity (e.g., from AI) justifies it, but that nuance gets lost when traders see a hawkish headline.

The result:

• Dollar index ripped,

• Gold and silver suffered historic one-day crashes — silver down ~30%+, gold double-digit red — which is wild given their “safe haven” branding.

• And risk assets across the board, including BTC, got smacked as people re-set rate and liquidity expectations.

Bitcoin is still heavily treated as “macro high beta” by big money. When the dollar spikes and the market imagines a more hawkish Fed chair, crypto feels it first.

2.2 Geopolitics: Iran, oil, and risk-off

Layered on top: markets are also gaming out the probability of a US strike on Iran and a potential Iranian response, including chatter about threats to the Strait of Hormuz.

Why that matters:

• Hormuz handles a massive percentage of global oil flows.

• Any credible threat there → higher oil → more inflation drama → more volatility and more pressure on anything “speculative.”

So you’ve got:

• A new, potentially hawkish Fed chair incoming,

• A rising dollar,

• Commodities ripping around on war fears,

• And a risk complex that’s already fragile after months of ETF outflows.

That’s the macro soup BTC is swimming in right now.

3. Structure: ETF Outflows, Leverage, and the Ghost of 10/10

3.1 ETF flows: three months of “no thanks”

One big piece of this drawdown: US spot Bitcoin ETFs have been bleeding.

• Multiple reports note persistent outflows over the last three months, with US funds “shedding billions” while BTC slumped to two-month lows before this latest puke.

That matters because:

• 2024–early 2025 price action was ETF-driven on the way up.

• If those same vehicles are now net sellers (or just not buyers), you can’t rely on “institutions will save the dip” as a free call option.

3.2 Liquidations: $1.6–1.7B in a day

On the derivatives side:

• We’ve just had another $1.6–1.7B day in liquidations, most of it longs.

• One data point: ~270–400K traders blown out across BTC, ETH, SOL, XRP and friends in ~24 hours.

It’s not Oct 10’s legendary $19B liquidation day, but it rhymes:

• Leverage had quietly built back up

• Macro shock + thin weekend liquidity = air pocket

• OI drops, perps get cleaned out, spot gets dragged

3.3 The 10/10 scar tissue

We’re still living with the hangover from Oct 10, 2025:

• Around $19B in leveraged positions were nuked in a single session, the biggest deleveraging day in crypto history.

• A lot of that was tied up with USDe leverage loops (borrow in USDT/USDC → convert to USDe for 12%+ yield → loop as collateral → lever up yields to 20–70%+).

• When macro hit and USDe depegged, the loop imploded and took a huge chunk of the market with it.

In the post-mortem:

• OKX CEO Star Xu argued that Binance’s promotion of USDe as collateral with high yields helped create systemic risk.

• Wintermute’s founder pushed back hard, calling attempts to blame one exchange “intellectually dishonest” and describing 10/10 as “a flash crash on a mega-leveraged market on an illiquid Friday night driven by macro news.”

Why does this matter today?

Because the microstructure changed:

• Some market makers are more cautious in “off hours.”

• Risk desks are more conservative on what they’ll accept as collateral.

• Retail still hasn’t fully internalized how dangerous layered leverage + macro actually is.

So when you get another Warsh-plus-war-fears weekend, the market reacts from a place of reduced depth and scarred liquidity.

4. Psychology: $30K Memes, Bear Market Calls, and Gold Victory Laps

The data is one thing. The story people tell themselves is another — and that’s shifting fast.

4.1 “We’re in a bear market now”

Analysts and influencers are very openly revisiting the “bear market” label:

• Cowen and others point out BTC has rejected at classic bear-market resistance bands, and that the current cycle’s timing lines up eerily well with prior cycles right before extended downside.

• The popular soundbite making the rounds: “The next major support for bitcoin is $30K.”

Is that guaranteed? No.
But the important part is that market participants believe it’s plausible.

4.2 Schiff and the “you should have just bought gold” narrative

On cue, gold maxi commentary is back:

• Peter Schiff is highlighting that BTC is now worth only ~15.5 ounces of gold — down roughly 57% from the 2021 peak, and only 10% above the 2017 ratio high.

Zoomed out, he’s not wrong on that specific metric. The ratio swings are part of how cyclical BTC is.

Where people get in trouble is:

• Treating that as a reason to panic-sell at structurally important levels,

• Or completely ignoring the macro/structural context and seeing it as “proof” that BTC has failed permanently.

4.3 “Safe haven” disappointment

Another emotional undercurrent: Bitcoin is once again not behaving like a safe haven:

• Geopolitical tension is rising.

• War and tariff headlines are everywhere.

• And BTC is down 20–30% from its highs while the dollar squeezes and gold just had its own historic rug.

That doesn’t mean the inflation/debasement hedge thesis is dead.
It just reinforces something we’ve talked about before in DegenDen:

In the current regime, Bitcoin trades like a leveraged macro asset first, “digital gold” second.

Until the holder base and macro plumbing shift, you should expect BTC to flinch with other risk assets when the dollar bites or rate expectations re-price higher.

5. So… Is $30K Actually on the Table?

Short answer: it’s not impossible, but it’s not “inevitable” either.

To get from here (high-70Ks) to 30Kish, you’d probably need a combo of:

1. Macro:

   • Warsh actually delivering significantly tighter policy than markets currently expect,

   • Or a prolonged risk-off environment (war escalation, deep recession, or both).

2. Flows:

   • ETF outflows continuing or accelerating,

   • Long-term holders finally puking a bigger chunk of coins, not just rotating.

3. Structure:

   • Another 10/10-level deleveraging (or series of them),

   • Some kind of structural shock (stablecoin failure, regulatory nuke, etc.).

Some analysts are explicitly modeling $50K → $30K as a bear-case path if we repeat prior cycle drawdowns after the peak.

But remember:

• In prior cycles, macro was very different (no ETFs, less institutional participation, different rate environment).

• Today, we’ve got ETFs holding ~7%+ of supply, governments and corporates holding ~17% of all BTC, and BTC processing multi-trillion-dollar settlement flows over 90-day windows.

Downside is absolutely real.
But the “straight line to $30K” story assumes a lot of things go wrong and stay wrong.

6. How to Think About This If You’re Not a Day-Trader

Not financial advice — just frameworks.

6.1 Separate timeframe from emotion

• If your horizon is days/weeks, this is a minefield. Macro headlines are driving flows; liquidation clusters are everywhere; liquidity is patchy on weekends.

• If your horizon is years, the right questions look more like:

  • “Has the structural story (supply schedule, network effects, treasuries, ETFs) broken?”

  • “Is the current drawdown in line with, or worse than, prior post-peak corrections?”

  • “Am I comfortable with the reality that BTC is not an intraday hedge for war headlines?”

Right now, nothing in the structural stack looks “broken” — it looks stressed, de-leveraging, and macro-sensitive.

6.2 Respect how leverage works… especially on weekends

Gaevoy’s 10/10 comment is worth internalizing:

This is what happens when macro news hits a mega-leveraged market during illiquid hours.

We just watched a smaller version of that:

• Warsh nomination → macro shock

• Weekend → thinner books

• ETFs already selling → less marginal support

• Result → outsized move, big liquidations, social panic

Building huge levered positions into that kind of environment is basically asking to become a liquidation statistic.

6.3 Don’t anchor to one number

• $30K is currently the meme.

• Before that, it was $50K.

• Before that, $74K.

Every cycle, people fixate on a single level and then feel betrayed when price doesn’t obey the meme.

A healthier mental model:

• Think in zones, not exact ticks (e.g., “mid-70Ks panic zone,” “50–60K structural test,” etc.)

• Plan your risk ahead of time:

  • How much exposure are you genuinely willing to carry if BTC does round-trip to those zones?

  • At what point does your personal thesis break?