The cryptocurrency market today (1/2/2026) is undergoing a severe sell-off, with Bitcoin (BTC) falling below the threshold of 80,000 USD and ETH below 2,500 USD

Here are the main reasons leading to this decline:

1. Political and economic instability in the U.S.

  • The U.S. government partially shuts down: The failure of Congress to reach a budget agreement by the deadline of 31/1/2026 has caused key government agencies to suspend operations, shocking financial investor sentiment.

  • Fed policy: The personnel change at the Federal Reserve (Fed) with Kevin Warsh being selected as the new Chairman has raised concerns about tightening monetary policies. Inflation data (PPI) for December 2025 being higher than expected has also pushed back rate cut expectations to June 2026 or later.

2. Geopolitical tensions escalate

  • Reports of the explosion at Bandar Abbas port (Iran) — a key link in global oil and gas transportation — have triggered a wave of flight from risky assets to seek safe havens.

3. Sell-off pressure and net capital outflows

  • Bitcoin ETF bleeding capital: Spot Bitcoin ETF funds have recorded large net outflows, estimated at around $818 million in just one day, led by BlackRock's iShares Bitcoin Trust (IBIT).

  • Liquidation of leveraged positions: Over $1.6 billion in Long and Short positions have been liquidated in the past 24 hours as the market experienced significant volatility, creating a "cascade" effect that pushed prices down further.

4. Technical and psychological factors

  • Low weekend liquidity: Thin trading volume on holidays has made price volatility more extreme.

  • The collapse of the commodities market: The steep decline of precious metals like silver (down 27%) has spilled over into the crypto market, as investors flee from speculative portfolios.

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