Bitcoin (BTC) plummeted below the psychological $80,000 barrier on Monday, extending a weekend sell-off that has wiped over $111 billion from the global cryptocurrency market. The flagship digital asset dropped more than 6% to trade near $77,900, reaching levels not seen since April 2025. The sharp decline comes in the immediate aftermath of President Donald Trump’s nomination of former Federal Reserve Governor Kevin Warsh as the next Fed Chair, a move that has sent shockwaves through risk assets globally.

Kevin Warsh Nomination Triggers "Hawkish" Panic

President Trump’s announcement on Friday, January 30, that he had selected Kevin Warsh to succeed Jerome Powell has triggered a massive repricing of risk across financial markets. While Warsh is a seasoned veteran of the Federal Reserve Board (2006–2011), his historical stance against quantitative easing (QE) and loose monetary policy has spooked crypto investors who thrive on liquidity.

Unlike the current Fed Chair Jerome Powell, who has navigated a delicate balance of rate cuts, Warsh has a record of being a monetary hawk. In the past, he criticized the Fed’s balance sheet expansion as a threat to the dollar’s long-term stability. For a crypto market that often functions as a hedge against currency debasement, the prospect of a Fed Chair committed to "sound money" and fiscal discipline undercuts the primary bull case for Bitcoin as a hedge against inflation.

"The market is pricing in a liquidity crunch," said a senior analyst at a major digital asset fund. "Warsh isn't just a leadership change; he represents a potential regime shift back to hard money principles that could starve risk assets of the cheap capital they've relied on."

Crypto Market Sell-Off: $1.6 Billion Liquidated

The reaction was swift and brutal. Data from Coinglass reveals that over $1.6 billion in leveraged positions were liquidated in the last 24 hours alone, with the vast majority being long positions betting on a price increase. This cascade of forced selling accelerated the Bitcoin price crash, pushing it through key support levels at $82,000 and $80,000 with little resistance.

Ethereum (ETH) suffered even steeper losses, plunging over 11% to trade around $2,390. The Ethereum price drop today reflects a broader exodus from altcoins, as traders rush to secure capital in stablecoins or fiat currency. Solana (SOL) and other major tokens also posted double-digit losses, signaling a widespread "risk-off" sentiment.

Warsh's Complex History with Crypto

Investors are frantically digging into Warsh’s past comments to gauge his future policy. In 2015, he famously dismissed Bitcoin as merely "software pretending to be money." However, his views have evolved; in a 2021 interview, he acknowledged Bitcoin as a potential "store of value, like gold." despite this softened stance, his nomination is viewed as a net negative for liquidity.

"He might not hate crypto, but he hates inflation and easy money even more," noted one macro strategist. "That's a dangerous combination for assets that correlate with M2 money supply growth."

Federal Reserve Leadership Change Looming

The Federal Reserve leadership change is set to take place in May 2026, when Jerome Powell’s term officially expires. However, markets are forward-looking mechanisms, and they are already adjusting to the Warsh era. The transition comes at a delicate time; the U.S. economy is grappling with mixed signals, and crypto geopolitical tensions—including recent unrest in the Middle East—have failed to bid up Bitcoin as a safe haven, further confusing the narrative.

Instead of flocking to digital gold, investors are moving into cash and short-term Treasurys, driving the U.S. Dollar Index (DXY) to a nine-month high. This strength in the dollar is acting as a wrecking ball for commodities and crypto alike, with silver prices also crashing over 30% in a historic single-day drop alongside Bitcoin.

What's Next for BTC Below 80000?

Technical analysts are now eyeing the $75,000 level as the next critical line of defense. If BTC below 80000 becomes the new normal for the coming weeks, we could see a prolonged period of consolidation or a further capitulation event.

The coming Senate confirmation hearings for Kevin Warsh will be the next major catalyst. Crypto lobbyists and financial experts will be watching closely for any comments regarding digital asset regulation or a confirmation of his hawkish monetary philosophy. Until clarity emerges, volatility is expected to remain the only certainty in the market.