Why Is Crypto Market Crashing Today?

Cryptocurrency markets experienced a significant drop on Friday, falling 7.61% to $2.24 trillion within 24 hours. The decline was largely driven by a massive liquidation triggered by fears of stricter macroeconomic policies. Bitcoin led the way, falling below $65,000 and dropping 8.07% to $65,076.14. Ether also saw a drop, falling below $2,200, while XRP slipped under $1.40. Solana fell below $95, adding to the overall market losses.

Investors were hoping of U.S interest rate cuts, but these hopes are gone. There is a 90% probability of the probability that rates will stay between 3.50% and 3.75% in the markets, with only a 10% possibility of a rate cut during March.

Although the U.S. government shutdown was resolved, there is a strain on the crypto prices. At this point, the market seems to be more sensitive to the signals provided by the monetary policy than the political events.

Bitcoin and Ethereum Price Slump Sends Shockwaves Through Crypto Market

Bitcoin and Ethereum prices plunged sharply, leading the broader cryptocurrency market into a downturn. 

BTC price has recently fallen more than 6%, trading at $71,000, and Ethereum price crashed to 5.5% to $2,134.

This selling spurt follows as insto investors sell crypto holdings in large amounts. Interestingly, U.S. spot Bitcoin ETFs had an incredible net outflow of over 545 million on February 4. The BlackRock IBIT fund had the biggest outflow on a single day as it lost $373 million. 

The Ethereum spot ETFs also experienced losses amounting to $79.48 million in outflows.

According to SoSoValue, on Feb. 4 (ET), U.S. spot Bitcoin ETFs recorded total net outflows of $545 million. The BlackRock spot Bitcoin ETF IBIT saw the largest single-day net outflow at $373 million. Spot Ethereum ETFs posted total net outflows of $79.48 million, while XRP spot… pic.twitter.com/MTeAfK2r3H

— Wu Blockchain (@WuBlockchain) February 5, 2026

Bearishness is increasing, and Ethereum has fallen below a key support line, aggravating the market panic. In reaction, the Crypto Fear & Greed Index has dropped to 11, indicating Extreme Fear. This indicates a significant change in the level of confidence in retail investors.

Should the trend persist, the Bitcoin price could drop to the lowest point of under $69,000. Ether might also fall below $2,000. Nevertheless, when buyers take back power, a recovery can occur, and this gives an inkling of hope to the short-term.

XRP and Solana Price Slide as Altcoins Face Market Pressure

XRP and Solana prices dropped sharply as the broader altcoin market continues to struggle. In the last day, XRP price has decreased by 12% and has settled at $1.40. The token might be briefly recovered to a point of $1.50 in case it persists.

A drop to less than $1.40, however, can trigger another test at the new low of $1.35. The steep drop of the open interest is also linked to the XRP weakness and is at its lowest since November 2024, reflecting the reduced interest of the derivatives traders.

Solana price has fallen by 4.84%, currently at $92.37. This is the lowest that SOL has ever traded since 2024.

NEW: $SOL breaks below $95 for the first time since February 2024, hitting its lowest level in nearly two years. pic.twitter.com/KlwzWqdY7y

— SolanaFloor (@SolanaFloor) February 4, 2026

If the Solana price remains above the $90 swing low, a relief rally toward $100 could develop. A drop below $90, though, might trigger a deeper decline toward the $80 level.