🚨 Bitcoin Cracks $80K as Warsh Fed Shock Triggers $2.5B Crypto Flush—Is $75K the Line in the Sand?

Bitcoin’s fragile truce with the $80,000 level didn’t survive the weekend.

The world’s largest cryptocurrency slid sharply after markets absorbed confirmation that Kevin Warsh will become the next Chair of the U.S. Federal Reserve, a development that immediately jolted risk sentiment and unleashed a wave of deleveraging across crypto markets.

According to analysts at QCP Asia, the move sparked a classic risk-off cascade—one that didn’t stop at digital assets.

Bitcoin broke below $80,000, triggering technical stop-losses and margin calls that sent prices briefly tumbling to around $74,500. Ether followed suit, slipping below $2,170, as leverage rapidly unwound across derivatives markets.

The damage was swift:

By Monday, Bitcoin had stabilized near $74,500—but analysts warn the calm may be fragile.

The sell-off wasn’t isolated.

Risk aversion rippled across global markets as traders reassessed the likely policy trajectory under a Warsh-led Fed. Equities softened, while traditional safe havens like gold and silver pulled back from recent highs, signaling a broader repricing of monetary expectations.

Markets are now assigning a higher probability to earlier policy normalization or tighter financial conditions, a narrative that tends to weigh heavily on non-yielding assets—including crypto.

Despite the sharp drop, QCP notes that options markets tell a more nuanced story.

Positioning remains skewed toward downside protection, but hedging demand is notably less aggressive than during previous stress episodes. During November’s plunge from $107,000 to $80,500, put buying surged far more violently than it has around the mid-$70,000 range.

That suggests a significant portion of excess leverage may already have been flushed out.

Still, momentum indicators remain pointed lower, and upside appears capped near recent resistance—leaving Bitcoin exposed if key support fails.

For now, Bitcoin is hovering above a technically important zone. The $74,500 area aligns with cycle lows seen in 2025, making it a critical battleground.

QCP outlines two clear paths from here:

“In the current environment, attention will focus on whether institutional accumulation re-emerges,” QCP said, pointing to Strategy’s average cost basis near $76,000 as a potential support signal. Analysts also flagged geopolitical risks—particularly around Iran—and upcoming Fed communication as key variables.

Any remarks from Chair-designate Warsh that soften expectations of tightening could offer temporary relief.

Not everyone sees the drop as a warning sign.

Analyst PlanC argues Bitcoin’s dip toward $77,000 has the hallmarks of a capitulation-style low, not the beginning of a prolonged bear phase. He compares the move to past shakeouts that preceded major recoveries, including:

According to PlanC, the likely cycle bottom sits between $75,000 and $80,000, framing the weekend plunge as a final cleanse within an ongoing bull market.

Bitcoin has rebounded modestly toward $78,600, but the damage is clear:

Whether this was a violent reset—or just the opening act of a deeper correction—now hinges on macro signals, institutional behavior, and the tone set by the incoming Fed leadership.

For traders and investors alike, one thing is certain:
the $75K–$80K zone has become Bitcoin’s most important battleground of the cycle.