Bitcoin is down by 5.38% over the last 24 hours, currently trading at ₹69,30,461. This drop did not happen due to a single event. Instead, it reflects a combination of global equity market weakness, economic uncertainty, interest rate expectations, and internal dynamics of the crypto market.

Below is a step-by-step explanation in simple terms.

5 Reasons Why Bitcoin Crashed Today

1. Global Tech Stock Selloff And Its Effect on Bitcoin

Over the past few trading sessions, large technology companies such as Apple, Microsoft, Nvidia, Amazon, and Alphabet experienced heavy selling in global stock markets. 

• Several large US tech stocks fell between 3-6% within two trading days.
• The Nasdaq index, which tracks technology-heavy companies, lost a significant amount during this period. The selling was not isolated to a single company, indicating a broader shift in investor sentiment.

Technology stocks are generally considered high-growth, higher-risk assets. When selling occurs across the sector, it often signals that investors are becoming more cautious.

How does this lead to Bitcoin (BTC) selling?

Investors typically categorize assets into:

• low-risk assets such as cash and government bonds
• high-risk assets such as tech stocks and cryptos

When investors see losses in tech stocks, they often reduce risk across their entire portfolio.

This means they sell not only stocks, but also other assets which they perceive as risky, such as Bitcoin. As a result, selling pressure in tech stocks can spill over into cryptos like Bitcoin.

2. Geopolitical and Economic Uncertainty

At the same time as the stock market selloff, global uncertainty increased due to:

• Increased geopolitical tensions between the United States and Iran
• Persistent concerns about inflation remaining high
• Ongoing discussions around trade and economic policy

Such factors make future economic conditions harder to predict. In uncertain environments, investors often shift focus from growth to capital preservation.

In such situations, investors usually allocate their capital to cash, government bonds, and other low-risk fixed-income instruments.

Bitcoin is still widely viewed as a volatile asset. As funds rotate out of risk-oriented assets, demand for Bitcoin can weaken, adding downward price pressure.

3. Kevin Warsh Fed Chair Nomination

On January 30, 2026, US President Trump announced he had officially nominated Warsh as the next chairman of the Federal Reserve to succeed Powell.

The US Federal Reserve is the central bank of the United States. It controls interest rates, which directly influence the flow of money into financial markets.

Low interest rates encourage borrowing and increase the flow of money into stocks and crypto.

High interest rates:

• make borrowing expensive
• reduce money available for speculative investments

Kevin Warsh, who was appointed as the new Federal Reserve Chair by President Donald Trump, is widely perceived as someone who supports tighter monetary policy, meaning keeping interest rates higher for longer. 

Higher interest rate environments tend to favor assets that generate predictable returns, such as bonds. Bitcoin does not provide yield or income on a regular basis, making it relatively less attractive when real yields rise. This shift in preference can reduce demand and lead to selling pressure on Bitcoin prices.

4. Heavy Liquidations and ETF Outflows

A significant portion of Bitcoin trading involves leverage, where traders borrow funds to increase position size, which is known as leveraged trading.

When Bitcoin prices fall sharply:

• Leveraged positions may be automatically closed
• These forced sales are known as liquidations

Liquidations increase selling pressure for Bitcoin because:

• Occur automatically
• Execute at market prices
• Cannot be delayed by traders

What Bitcoin ETF outflows mean

Heavy ETF outflows on Feb-3-4 have contributed to Bitcoin’s price in February

Bitcoin Exchange Traded Funds (ETFs) allow investors to gain exposure to Bitcoin without holding it directly. Normally, ETFs buy Bitcoin when investors invest in them, which creates steady demand.

Recently, several Bitcoin ETFs recorded daily net outflows amounting to hundreds of millions of dollars. These outflows:

• Removed a key source of spot market demand
• Added to short-term selling pressure

When liquidations and ETF outflows occur simultaneously, selling increases while demand decreases, leading to sharper price declines.

5. Michael Burry’s warning

Michael Burry is an investor known for predicting the 2008 global financial crisis. Recently, he warned that Bitcoin price declines could trigger cascading effects across markets, especially given institutional and corporate exposure. During falling markets, such warnings increase fear, reduce buying interest, and add to short-term selling pressure on assets like Bitcoin.

Weekly Performance Of Bitcoin

Over the past week, Bitcoin has declined steadily rather than collapsing suddenly. Trading volumes rose during the decline, showing that many participants were actively selling. This points to a market correction driven by money movement and risk reduction, not a failure of Bitcoin’s underlying system.

Bitcoin Technical Analysis – February 5, 2026

The Bitcoin price in India is at ₹69,30,461, and its technical structure is clearly bearish, trading below key moving averages ranging from the 10 EMA to the 200 SMA, indicating a sustained downtrend.

• Moving averages continue to signal persistent selling pressure
• RSI near 21 suggests oversold conditions, though oversold readings can persist during strong downtrends
• MACD and momentum indicators remain negative, reflecting weak demand

Until price reclaims key averages near $78k to $80k, this looks like a bearish continuation, not a bottom.

Conclusion

Bitcoin may remain volatile in the short term as investors react to economic uncertainty and interest rate expectations. In such phases, emotional reactions often lead to poor decisions. Understanding how demand, liquidity, and macro signals affect price becomes more important than predicting short-term moves.

Frequently Asked Questions

Why is Bitcoin crashing today?

Bitcoin is declining due to reduced risk appetite, lower demand, ETF outflows, and increased forced liquidations.

What happened to BTC today?

BTC fell due to equity market weakness, economic uncertainty, interest rate concerns, ETF outflows, and liquidations.

Will Bitcoin rise again?

Bitcoin has recovered from past corrections, but future price movements depend on economic conditions and investor confidence.