Bitcoin dropped to a six-week low, sliding just above $81,300.
Meanwhile, CoinGlass reported that traders liquidated 273,244 positions in 24 hours, losing $1.7 billion combined.
Bitcoin Plummets Amid Market Turmoil
Notably, HTX saw the largest liquidation, where a BTC-USDT order worth $81 million vanished.
At the same time, market nerves shook after news of a potential Federal Reserve leadership change.
President Trump plans to nominate former Fed governor and Stanford professor, Kevin Warsh, for the role.
Importantly, Warsh criticised recent Fed policies and supports Trump’s push for lower interest rates.
He led a shortlist including Hassett, Waller, and BlackRock’s Rieder, and emerged as the frontrunner.
Moreover, geopolitical tensions intensified market panic, as Iran’s situation heightened investor fears.
Trump also deployed the Abraham Lincoln Carrier Strike Group to the Middle East recently.
Options Market Shows Investor Anxiety
In addition, Bitcoin options show a put/call ratio of 0.54, signalling more investors bet on rising prices.
Consequently, the “maximum pain” sits at $90,000, above current prices, meaning many traders will lose.
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Furthermore, traders maintain open interest at $1.9 billion at the $100,000 strike price on Deribit.
Around 91,000 options contracts will expire this Friday, adding further pressure to the market.
Broader Markets Feel The Shock
Meanwhile, traditional markets reacted sharply: U.S. crude rose over 2.5%, and Brent neared $70 a barrel.
In contrast, gold fell sharply, dropping from $5,500 per ounce to $5,100 in a single day.
Since the year began, cryptocurrency investors have lost roughly $250 billion amid steady Fed rates.
Additionally, bearish bets increased with over $1 billion in open interest at key strikes.
Overall, total Bitcoin options open interest across exchanges reached $58 billion this year.
Spot and futures volume also declined, showing that selling pressure drives Bitcoin’s ongoing slide.
Finally, investors brace for February, expecting volatility amid political, geopolitical, and market uncertainty.
