The Daily Drip

✅ Top Takeaways

• BTC breaks $70K: Bitcoin plunged over 10% to about $65,560–65,750, its lowest level since November 2024 and roughly 45% below the October 2025 peak near $126K, with about $775M in liquidations across the market.
• XRP leads the downside: XRP crashed about 19% to $1.22, its weakest level since late 2024, as a clean break below the $1.40 support opens the door to technicians’ targets around $1.25 and, in an ultra‑bearish case, even $0.53.
• Policy & flows turn hostile: Warsh’s hawkish nomination, multi‑month BTC ETF outflows and Treasury officials downplaying support for crypto have pushed the S&P Broad Crypto Index to a 17.5% year‑to‑date loss and sentiment toward outright capitulation.

📰 Crypto Market Summary

Bitcoin plunged over 10% to $65,560, hitting its lowest level since November 2024 and erasing all gains since Trump's election. The cryptocurrency is now down 45% from its October 2025 peak near $126,000, triggering $775 million in liquidations across the market.

XRP suffered the steepest losses among major cryptocurrencies, crashing 19% to $1.22, its lowest level since November 2024. Analysts warn breaking below $1.40 support opens the path to further declines toward $1.25 or potentially $0.53 in an ultra-bearish scenario.

Ether dropped nearly 10% to $1,932, marking its lowest point since May 2025, while Solana fell 11% to $81.76. Both cryptocurrencies are testing critical support levels, with Ethereum at risk of falling to $1,760 if the $2,100 support fails.

Kevin Warsh's nomination as the next Federal Reserve Chair triggered widespread selling in crypto markets. Warsh is known for favoring higher real interest rates and a smaller Fed balance sheet, pushing the Dollar Index above 97.5 and making speculative assets less attractive.

U.S. spot Bitcoin ETFs experienced massive outflows totaling over $7 billion in November, $2 billion in December, and $3 billion in January. Deutsche Bank analysts warn this consistent selling signals traditional investors are losing interest and overall pessimism about crypto is growing.

Treasury Secretary Scott Bessent testified before Congress that the Treasury lacks the power to stabilize cryptocurrency markets. This disappointing statement crushed hopes for Trump administration support and accelerated Bitcoin's decline below the critical $70,000 threshold.

Market sentiment has deteriorated sharply, with the Crypto Fear and Greed Index falling to 15, a level associated with extreme fear. U.S. crypto adoption has slipped to about 12% from 17% last summer, according to Deutsche Bank consumer surveys.

A brutal selloff in global technology stocks compounded crypto losses, with the Nasdaq 100 down over 2%. Thinning liquidity amplified price moves, contributing to forced liquidations after Bitcoin slipped through widely-watched support thresholds.

🌍 Macro & Policy Lens

With Warsh expected to favor higher real rates and a leaner Fed balance sheet, the policy backdrop now looks far less friendly to long‑duration assets than it did during the post‑pandemic QE era, helping push the Dollar Index above the 97.5 zone and tightening financial conditions across risk assets.

• Policy disappointment: Treasury Secretary Scott Bessent’s admission that the department lacks tools to stabilize crypto markets undercuts hopes for a backstop during stress events and reinforces the message that price discovery will be market‑driven.
• Tech‑crypto feedback loop: A more than 2% drop in the Nasdaq 100 adds another leg of pressure, as investors reduce exposure to both AI‑heavy growth stocks and high‑beta tokens that had benefitted from the same easy‑liquidity narrative.
• Adoption fatigue: Deutsche Bank survey data showing U.S. crypto adoption slipping from around 17% to roughly 12% since last summer suggests retail enthusiasm has cooled significantly, even before considering institutional outflows.

💰 Flows & Market Structure

ETF Flows yesterday were approximately -$626,171,206 in total, with spot crypto products seeing another heavy day of redemptions as prices broke key support levels.

Flow detail by underlying asset:

• Bitcoin ETFs: about -$544,900,000 in net outflows across U.S. spot BTC funds, extending the multi‑month redemption trend.
• Ethereum ETFs: roughly -$79,400,000 in net outflows from ETH products as traders de‑risk across smart‑contract exposure.
• Solana ETFs: around -$6,700,000 in net outflows, reflecting continued pressure on high‑beta L1s.
• Ripple / XRP ETFs: approximately +$4,828,794 in net inflows, one of the only major crypto ETF segments still attracting fresh capital on the day.

The combination of thin on‑exchange liquidity, derivatives liquidations and these ETF redemptions has pushed the S&P Cryptocurrency Broad Digital Asset Index down 4.6% on the day and 17.51% year‑to‑date, keeping price action firmly in forced‑seller territory.