Bitcoin Plunges to 2025 Lows as Liquidations Hit $740 Million Amid Political Turmoil

The cryptocurrency market has recently endured a period of intense volatility, culminating in a dramatic slide for Bitcoin to its lowest price point since April 2025. On Sunday, February 1, 2026, the leading digital asset plummeted below the $75,000 mark, reaching a low of approximately $74,500 according to Coinbase exchange data. This correction represents a decline of more than 40% from its previous all-time high of over $126,000. Analysts, including Joe DiPasquale of BitBull Capital, suggest that this downturn is a clear signal of a "risk-off" sentiment dominating the market, driven by a strengthening U.S. dollar and rising real yields.

This rapid price depreciation triggered a cascade of forced liquidations across the digital asset landscape. As of February 4, 2026, total liquidations in the derivatives market approached $740 million within a 24-hour period. This massive sell-off was the direct result of stop-loss orders being triggered mechanically after Bitcoin broke through several key technical support levels. Market observers noted that the low liquidity typically seen during weekends served to exacerbate the price collapse. Furthermore, the drop below $75,000 effectively erased all the gains recorded since Donald Trump’s election victory, highlighting the asset's extreme sensitivity to political and macroeconomic shifts. In contrast, traditional safe-haven assets like gold showed the opposite trend, climbing to new historical peaks.

Against this backdrop of financial instability, a political compromise was reached in Washington to conclude a partial government shutdown that had been in effect from January 31 to February 3, 2026. The new agreement provides funding for the majority of federal departments through September 30, 2026. However, the Department of Homeland Security (DHS) was only granted funding until February 13, 2026, leaving the resolution of immigration policy negotiations for a later date. This lingering political uncertainty failed to provide the necessary stability to reassure investors in high-risk markets.

Benjamin Cowen, an analyst at Into The Cryptoverse who tracks Bitcoin’s movements relative to the four-year U.S. election cycle, has expressed a cautious outlook. He noted that the current cycle, which peaked in the fourth quarter of 2025, aligns with historical models suggesting a transition into a bear market phase. While Cowen acknowledged the possibility of short-term rallies, his long-term forecast suggests that a cycle bottom may not be reached until October 2026. Additionally, the technical level of realized market value at $80,700 was breached for the first time since October 2023. Alex Thorn of Galaxy remarked that this breach indicates a significant structural weakness in the asset’s current valuation.

In the technology sector, Nvidia CEO Jensen Huang moved to quell rumors on February 3, 2026, regarding the company's investment strategy. Huang denied reports that Nvidia had canceled its plan to invest up to $100 billion in OpenAI. He clarified that the commitment was not a single, all-encompassing deal, but rather that Nvidia would participate in OpenAI’s next funding round with investments delivered in a "phased" manner. This statement was released as Nvidia’s stock price fell by 3.4% on Tuesday, helping to reduce some of the market anxiety surrounding the circular nature of deals within the artificial intelligence industry.

As the market processes these developments, the intersection of political deadlines and technical indicators remains the primary focus for investors. The upcoming February 13 deadline for DHS funding is expected to be a critical juncture that could either stabilize or further disrupt market sentiment. For now, the digital asset space remains under pressure as it navigates a complex environment of macroeconomic headwinds and structural shifts.