#加密市场观察 In the past 24 hours, the crypto world also experienced a "bloodbath." Bitcoin plummeted sharply, with intraday declines exceeding 7%, and the second-largest cryptocurrency, Ethereum, dropped over 11%. Other smaller market cap cryptocurrencies also dove. This sell-off has wiped out over $110 billion in total cryptocurrency market value in the past 24 hours.

The decline in cryptocurrencies occurred against a backdrop of thin liquidity and limited buying interest. Meanwhile, the dollar strengthened after former Federal Reserve Board member Kevin Wash was nominated as the next Fed Chair. Some investors and traders are concerned that he may tighten liquidity in the financial system.

This pullback has intensified the macro disappointment among investors towards Bitcoin over the past few weeks. Previously, Bitcoin failed to respond to a series of market dynamics that should have supported the asset. The dollar was weak for most of January, but this trend did not boost market sentiment for cryptocurrencies. Similarly, as gold prices soared to record highs, Bitcoin also showed no substantial reaction. After gold and silver prices fell sharply on Friday (January 30), Bitcoin also failed to attract capital inflows.

The persistent weak demand for Bitcoin raises questions about its role in broader investment portfolios. Once seen as a momentum trade and a hedge against currency devaluation, Bitcoin now struggles to serve both functions. Spot ETF funds continue to flow out, geopolitical risks have not stimulated demand, and traditional safe-haven capital flows remain concentrated in precious metals and cash.

Nedam analyst John Todaro said, "The current price levels reflect extremely low interest from retail investors," and trading volume may remain subdued for the next "one or two quarters."

Bryan Jacobson, Chief Economist at Annex Wealth Management, stated that the Fed's "bloated balance sheet combined with strict banking regulation" has caused liquidity to be trapped on Wall Street rather than flowing into the real economy, which has fueled bubbles in bonds, cryptocurrencies, metals, and "meme stocks."

Since the crash last year, cryptocurrencies have been struggling to find direction, lagging behind the sharp rises in gold and stocks. Jacobson said, "Sometimes these price adjustments reinforce themselves, and it’s possible—even likely—that we will see more sell-offs in the coming days."