Bitcoin Tumbles to Post-Election Low as Metals Meltdown Triggers Crypto Liquidation

Bitcoin's price slumped to its lowest point since the pre-2024 election period this week, breaching the $75,000 threshold before a partial recovery to around $78,500. The drop extends a brutal bear market that has seen the flagship cryptocurrency shed roughly 37% of its value since its October peak.

The immediate catalyst, according to market analysts, was a violent sentiment shift in momentum-driven trades, particularly in precious metals. Gold and silver, which have recently behaved more like speculative tech stocks than traditional safe havens, suffered a severe breakdown last Friday. This sell-off cascaded into the crypto markets, forcing highly leveraged traders to offload positions to cover losses.

Data from Coinglass confirms the severity: January 30 marked the tenth-largest single-day liquidation event in Bitcoin's history, with approximately $2.5 billion in long and short positions forcibly closed. This echoes, on a smaller scale, the historic $19.1 billion liquidation that kicked off the current bear phase on October 10, 2025.

The downturn underscores Bitcoin's persistent correlation with other risk-sensitive assets. The initial euphoria following former President Donald Trump's 2024 campaign promises—to foster crypto-friendly regulation and establish a strategic Bitcoin reserve—has largely dissipated as markets priced in those prospects. Now, broader macroeconomic anxieties are taking center stage.

Investor caution has been mounting amid concerns over trade tensions, a softening labor market, and political brinkmanship over government funding. The recent nomination of Kevin Warsh to chair the Federal Reserve has further fueled risk-off sentiment. While Warsh has recently advocated for lower rates, his longstanding reputation as a policy hawk has introduced uncertainty, unsettling markets that thrive in a low-interest-rate environment.

"The metals meltdown acted as the spark, but the kindling was already dry," said Kyle Rodda, senior market analyst at Capital.com. "A deleveraging cycle is in motion. Traders are being forced to sell profitable holdings, including Bitcoin, to meet margin calls on losing bets in gold and silver. This contagion effect is hitting all speculative assets."

Rodda added a pointed historical analogy: "Every market bubble needs a pin. This time, the nomination of Warsh to replace Powell appears to have been that pin."

Market Voices: A Split Reaction

Eleanor Vance, Portfolio Manager at Horizon Trust: "This is a painful but necessary deleveraging. The excessive speculation in both crypto and metals had to unwind. Long-term, this creates a healthier entry point for disciplined investors who believe in the underlying technology and its role as a non-sovereign store of value."

Marcus Thorne, Crypto Venture Capitalist: "The narrative is shifting from 'digital gold' to 'high-beta risk asset.' That's the reality check. The sell-off proves Bitcoin remains deeply tied to traditional market liquidity and sentiment. Our focus needs to be on real-world utility and adoption, not just macroeconomic speculation."

David Chen, Independent Trader: "It's a bloodbath fueled by arrogance and over-leverage. Everyone bought the 'Trump put' and forgot basic risk management. Warsh's nomination is a disaster for easy money addicts. The party's over, and the hangover will be long and brutal for those who didn't take profits."

Rebecca Shaw, Economics Professor at Carlton University: "This event is a classic study in interconnectedness. It highlights how leveraged positions in one asset class can create systemic pressure in seemingly unrelated markets. Regulators watching this volatility will likely double down on calls for stricter oversight of crypto derivative products."