Bitcoin extended its sell-off on Thursday, falling to around $84,000, its lowest level since November 2025, as panic swept through global cryptocurrency markets. The world’s largest digital asset dropped more than 6 percent in a single day, triggering a broad decline across major tokens. Ethereum, XRP, Solana and other top cryptocurrencies also posted sharp losses, underlining the scale of the market downturn.

The renewed pressure on Bitcoin followed signals from the US Federal Reserve that monetary policy would remain tight for longer than many investors had hoped. At its latest meeting, the central bank had kept its benchmark interest rate unchanged within the 3.50 percent to 3.75 percent range. However, policymakers stressed that inflation risks remained and that rate cuts were not likely in the near term. This ‘higher-for-longer’ message has reduced demand for speculative assets, as investors increasingly favour safer, yield-producing investments.

For Bitcoin, which thrives when liquidity is abundant and risk appetite is strong, the shift in sentiment proved costly. As bond yields became more attractive, traders rushed to cut exposure to cryptocurrencies, sparking one of the largest single-day liquidation events in recent months, Economic Times reported.

Data cited by AD Hoc News showed that between $740 million and $800 million worth of leveraged crypto positions were forcibly closed within 24 hours. According to DL News, total futures liquidations climbed to $822.4 million, with $696.8 million coming from long positions. Of this amount, $313.7 million was directly linked to traders betting on a continued rise in Bitcoin’s price. The heavy dominance of long liquidations suggested that many investors were caught off guard by the speed of the market reversal.

The downturn in digital assets was not happening in isolation. Bitcoin’s slide closely tracked weakness in traditional financial markets, particularly in the technology sector. The Nasdaq index fell by roughly 2 percent on Thursday, while Microsoft shares plunged 12 percent, highlighting the growing correlation between cryptocurrencies and risk-sensitive equities.

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Market analysts say this connection is becoming harder to ignore. Director of Market Research at Unchained, Mr Timot Lamarre, noted that although many in the crypto community viewed Bitcoin as ‘hard money’ and a hedge against inflation, most participants still traded it like a tech stock. He explained that during periods of market stress, Bitcoin was sold alongside growth shares rather than behaving like a safe haven.

As investors fled risky assets, they moved into traditional stores of value. Gold surged above $5,600 per ounce, marking a fresh high and reinforcing its role as a defensive asset during times of uncertainty. The CoinDCX Research Team told The Economic Times that overall market sentiment had slipped into fear, adding that gold’s strong rally had diverted liquidity away from cryptocurrencies and into conventional assets.

Regulatory concerns also added to the pressure on Bitcoin and the wider crypto market. In Washington, the US Senate Agriculture Committee narrowly voted 12–11 to advance the Digital Commodity Intermediaries Act. If passed, the legislation would grant the Commodity Futures Trading Commission (CFTC) direct oversight over digital commodities such as Bitcoin. Democrats opposed the bill, arguing that it did not provide sufficient consumer protection.

At the same time, the Securities and Exchange Commission (SEC) and the CFTC announced a joint initiative known as ‘Project Crypto,’ aimed at developing a unified regulatory framework for digital assets. While supporters say clearer rules could benefit the industry, investors remain uneasy about how stricter oversight may affect trading, innovation and market growth.

Institutional activity reflected this mixed and cautious mood. On one hand, Sygnum Bank raised $65 million for its BTC Alpha Fund, signalling continued interest from some professional investors. In Asia, Metaplanet secured $137 million to expand its Bitcoin holdings, reinforcing confidence among long-term believers.

On the other hand, institutional flows in the US told a different story. Spot Bitcoin exchange-traded funds (ETFs) recorded outflows of between $140 million and $160 million, indicating that some large investors are reducing exposure amid rising uncertainty.

Looking ahead, traders are closely watching the $84,000 level as a key technical support zone. A decisive break below it could open the door for Bitcoin to test the psychologically important $80,000 mark. Market participants are also focused on a February 2 meeting involving White House officials, banking executives and cryptocurrency lobbyists. The talks are expected to address stalled digital asset legislation, and any policy signals from the meeting could shape the next phase of Bitcoin’s price movement.

For now, the market remains on edge, caught between tighter monetary policy, regulatory uncertainty and shifting investor sentiment.