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Bitcoin’s $70,000 Support Level Breaks as ‘Warsh Shock’ Causes Significant Liquidity Withdrawal
Bitcoin plunged beneath the significant $70,000 support threshold on Thursday, reaching a 15-month low as markets rapidly adjusted their liquidity expectations with the impending appointment of Federal Reserve Chair Kevin Warsh.
The leading cryptocurrency dropped to a low of $67,619. This decline wiped out $40 billion from open interest in less than 48 hours, indicating a capitulation among leveraged long positions.
The trigger? The market’s reaction to President Trump’s selection of Kevin Warsh. Although Warsh has historically been supportive of cryptocurrency, referring to Bitcoin as “new gold,” traders are concerned about his well-known position on reducing the balance sheet.
JUST IN:
Trump nominates Kevin Warsh to be the new head of the federal reserve.
Kevin is the son-in-law of Ron Lauder the President of the World Jewish Congress which calls for the destruction of Israel’s enemies…
Israel runs every aspect of American power. pic.twitter.com/DxH6f7uFEV— ADAM (@AdameMedia) January 30, 2026
Trump nominates Kevin Warsh to be the new head of the federal reserve. The Liquidity Vacuum
Spot ETF flows intensified the downturn, with total assets under management falling below $100 billion for the first time in Q1.
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The technical damage is significant, as the $70,000 mark had acted as a stronghold for bulls throughout 2025. Its breach has revealed a lack of buying support below, with order books becoming sparse toward the mid-$60k range.
The contrast is pronounced: Gold reached new heights on Thursday, surpassing $5,100/oz. Investors are shifting from “risk-on” assets (BTC) to “safe-haven” assets (Gold), anticipating that Warsh’s tightening monetary policy will bolster the dollar and deplete the excess liquidity that drives crypto surges.
The Warsh Paradox: Pro-Bitcoin, Anti-Liquidity
This sell-off illustrates a nuanced assessment of the “Warsh Paradox.” Retail investors perceive a pro-Bitcoin nominee; institutions view a hawkish figure who opposes quantitative easing.
Warsh has clearly stated that the Fed’s enlarged balance sheet distorts asset valuations. The prevailing sentiment? The “Fed Put” is no longer in play. While Warsh may advocate for Bitcoin’s legitimacy, he will not create the dollars necessary to elevate its price. Anticipate ongoing volatility until the market establishes a price floor based on utility rather than liquidity surplus.
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