Bitcoin Price Drop: Falls Below $70K Amidst Fed Concerns & ETF Outflows

Bitcoin and Ether, the two largest cryptocurrencies, experienced significant declines on Thursday, February 5, 2026, continuing a downward trend that began in late 2025. Bitcoin approached falling below the key $70,000 level, reaching $70,052.38 during the Asian session, its lowest point since November 2024.

Market Downturn

The price of Ether also fell, dropping nearly 2% to $2,086.11. A fall below $2,000 would represent a new low for Ether since May of the previous year. Bitcoin has fallen more than 7% over the past week, resulting in a nearly 20% loss since the start of 2026. Ether has seen an even steeper decline, losing almost 30% of its value year-to-date.

Did You Know? A significant crash occurred in October of last year, causing Bitcoin to plummet from a previous high and eliminating leveraged positions.

Federal Reserve Policy and Crypto Markets

Analysts attribute the recent downturn to the anticipated nomination of Kevin Warsh as the next Federal Reserve chair and expectations that he will reduce the Fed’s balance sheet. Cryptocurrencies have historically benefited from a large balance sheet, as increased liquidity from the Fed has tended to support speculative assets.

Manuel Villegas Franceschi of Julius Baer stated, “The market fears a hawk with him. A smaller balance sheet is not going to give a boost to cryptocurrencies.”

Institutional Investor Activity

Deutsche Bank analysts suggest that large-scale withdrawals from institutional Exchange Traded Funds (ETFs) are a primary driver of the decline. These funds have experienced outflows of billions of dollars each month since a slowdown in October 2025. Specifically, U.S. Spot bitcoin ETFs saw over $3 billion in outflows in January, following approximately $2 billion and $7 billion in December and November, respectively.

Expert Insight: The consistent selling pressure from institutional investors suggests a waning interest in cryptocurrencies and a growing sense of pessimism within the industry.

According to Deutsche Bank analysts, these consistent sales indicate that traditional investors are losing interest and that overall pessimism towards cryptocurrencies is increasing.

Frequently Asked Questions

What has caused the recent decline in Bitcoin’s price?

Analysts believe the anticipated nomination of Kevin Warsh as the next Federal Reserve chair, and the expectation that he will reduce the Fed’s balance sheet, has triggered the recent decline.

How has Ether performed compared to Bitcoin?

Ether has experienced a steeper decline than Bitcoin, losing nearly 30% of its value since the beginning of the year, while Bitcoin has lost almost 20%.

What role are ETFs playing in the current market conditions?

Deutsche Bank analysts believe that large-scale withdrawals from institutional ETFs are a primary driver of the decline, with billions of dollars flowing out of these funds in recent months.

As market conditions continue to evolve, will institutional investors regain confidence in cryptocurrencies, or will the downward trend persist?