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Bitcoin Plunges 6%, Tracks Tech Stock Weakness Amid Hawkish Fed Fears

Bitcoin extended its sharp decline, falling over 6% to approximately $66,198, tracking a global sell-off in technology stocks and heightened risk aversion. The drop follows its steepest single-day fall since late 2024, which wiped out billions in asset value and triggered nearly $1 billion in leveraged position liquidations. Market sentiment was rattled by the prospect of a more hawkish US Federal Reserve under potential chair nominee Kevin Warsh, which could reduce liquidity for risk assets. Further pressure comes from sustained institutional withdrawals from Bitcoin ETFs and warnings of potential cash flow stress for crypto miners if prices continue to fall.

Key Points: Bitcoin Falls 6% as Hawkish Fed, Tech Rout Trigger $1B Liquidations

  • Bitcoin's sharpest drop since late 2024
  • $1B in positions liquidated in 24 hours
  • Fears of hawkish Fed under Kevin Warsh
  • Losses track global tech stock weakness
  • Institutional ETF outflows add pressure
2 min read

Bitcoin extends losses down 6 pc, tracking global weakness in tech stocks

Bitcoin extends losses, down over 6% to ~$66,198 amid risk aversion, heavy liquidations, and fears of tighter US monetary policy under a potential new Fed chair.

"nearly $1 billion of bitcoin positions were liquidated in 24 hours - Crypto market data"

Mumbai, Feb 6

World's largest cryptocurrency Bitcoin extended losses on Friday, falling over 6 per cent to about $66,198 as risk aversion, heavy liquidations, weakness in technology stocks, and fears of tighter US monetary policy rattled investors.

Bitcoin saw its sharpest single‑day decline since late 2024 on Thursday when it slid 12.6 per cent to roughly $63,300, its lowest level since October 2024, wiping out billions of asset value in dollar terms, multiple reports said.

Analysts said global investors pulling back from risky assets caused a drop in crypto assets, with volatility spilling into the segment from precious metals and tech stocks.

Crypto market data analytics platforms showed that nearly $1 billion of bitcoin positions were liquidated in 24 hours as leveraged traders were forced out, which caused a domino effect across crypto markets. Bitcoin has fallen 20.22 per cent this week, 28.86 per cent in a month, and 32.85 per cent in a year.

Ether, the second‑largest token, dropped over 13 per cent in a day and has lost nearly 38 per cent in 2026 to date.

Market watchers said previous cycles like this indicated that cryptocurrency has gone into a reset mode that could take months rather than a short-term correction.

Crypto market enthusiasm fell after US President Donald Trump nominated Kevin Warsh as his choice for Federal Reserve chair, as investors felt a more hawkish Fed under Warsh would shrink the central bank balance sheet, removing liquidity that has supported risk assets, they said.

Longer‑term pressure on crypto assets came from institutional exits as sustained withdrawals from institutional exchange‑traded funds, such as outflows of over $3 billion in January from US spot bitcoin ETFs.

Bitcoin's price has been in line with technology stocks, and the sustained sharp sell‑off in software and AI‑linked equities amplified losses as investors cut exposure, analysts said.

Market watchers also warned of forced liquidation among crypto miners if prices continue to fall, as they enter cash flow stress, reports said.

In 2025, the United States announced the creation of a Strategic Bitcoin Reserve, a move that highlighted Bitcoin's growing importance at a national and strategic level.

This step was widely seen as a signal of increasing acceptance of digital assets within traditional financial systems.

- IANS

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Reader Comments

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Priya S
Interesting to see the link with US monetary policy. The Fed chair appointment is causing ripples all the way here. Shows how interconnected global markets are now. Maybe a good time to study the charts for a potential entry point? 🤔
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Aditya G
The US creating a Strategic Bitcoin Reserve last year was a huge deal. It gave so much legitimacy. But these wild swings show that even with institutional acceptance, it's still a highly speculative asset class. Hodling is not for the faint-hearted!
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Sarah B
As someone who invested a small amount, this is painful to watch. The article says it could be a "reset mode that could take months." That's a long time to see your portfolio in the red. Feeling the FUD (Fear, Uncertainty, Doubt) right now.
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Karthik V
The domino effect from leveraged positions is scary. $1 billion liquidated in a day! This is a classic lesson in risk management. In India, we need more financial literacy around these new-age assets before diving in. Never invest more than you can afford to lose.
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Michael C
While the criticism of crypto's volatility is valid, let's not throw the baby out with the bathwater. The underlying blockchain technology is revolutionary. This price action might be separating the speculative noise from the real, long-term projects.
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Neha E

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