Market drops after Fed uncertainty and ETF outflows push crypto into ’Extreme Fear’
Cryptocurrency markets plunged after traders repriced expectations for US monetary policy. Bitcoin fell to around $81K (lowest since April 2025) and Ethereum slid to about $2.7K as the total crypto market cap lost roughly $180 billion. Significant outflows from spot ETFs — ~$817.8M from Bitcoin ETFs and ~$155.7M from Ethereum ETFs — coincided with a move higher in US Treasury yields and equities selling off. The catalyst was renewed uncertainty over the Federal Reserve’s leadership after President Trump nominated Kevin Warsh to replace Jerome Powell; markets reacted to the possibility of a tighter or unclear policy path. Short-term trading cues: watch whether $81K BTC holds, monitor ETF flows, and track changes in leverage and volatility. Other itemized news: MegaETH plans an Ethereum L2 mainnet launch on Feb 9 after high-throughput stress tests; OpenAI released Prism for research drafting with ChatGPT 5.2; 21Shares launched a Jito-staked SOL ETP in Europe; Talos raised $45M in Series B extension. Primary keywords: crypto market, Fed uncertainty, ETF outflows, Bitcoin price, Ethereum price. Secondary/semantic keywords: Treasury yields, risk-off, volatility, monetary policy, layer-2 launch.
Bearish
The news is bearish for crypto markets. Repricing of US monetary policy risks — driven by the nomination of Kevin Warsh and the resulting ambiguity about the Fed’s future stance — led to higher Treasury yields and a classic risk-off move that first hit bonds and equities, then crypto. Large ETF outflows (BTC and ETH) are a direct liquidity signal: ETFs aggregate retail and institutional allocation flows, so sustained withdrawals can pressure spot prices and reduce buy-side support. Historically, similar episodes (e.g., 2022 rate-hike cycles, and sell-offs around macro uncertainty) produced sharp short-term drawdowns and elevated volatility. In the short term, expect increased volatility, potential continuation of downtrends if ETF outflows persist, and a higher probability of opportunistic bounces when yields or equities stabilize. In the medium-to-long term, the market outlook depends on clarity of Fed policy and whether yields reverse; if the Fed tilts toward cuts later, risk assets including crypto could recover, but persistent higher rates and tighter liquidity would weigh on valuations and reduce leverage-driven rallies. Traders should monitor ETF flows, Treasury yields, equity indices, and BTC spot support (notably $81K). Risk management (position sizing, stop-losses, hedges) is advisable given elevated uncertainty and historically amplified downside during similar macro shocks.