TLDR
- Bitcoin and crypto markets lost $250 billion in total market cap over the weekend due to a US liquidity shortage, not crypto-specific issues
- SaaS stocks and Bitcoin dropped together because both are long-duration assets sensitive to liquidity conditions and interest rates
- The gold rally pulled marginal liquidity from the system that would have gone to Bitcoin and SaaS stocks
- Order-book data showed persistent sell pressure below $90,000 and a cluster of bids between $85,000-$87,500 before Bitcoin’s breakdown
- A single large player may be using “liquidity herding” to control Bitcoin’s price through visible sell orders
Bitcoin fell to $75,000 over the weekend as crypto markets shed $250 billion in total value. The selloff came as liquidity dried up across US markets.
Raoul Pal, founder of Global Macro Investor, said the drop is not a crypto problem. He pointed to SaaS stocks falling at the same rate as Bitcoin.
Both asset classes are long-duration assets. Their value depends on future cash flows and adoption rates. This makes them sensitive to liquidity and interest rates.
— Raoul Pal (@RaoulGMI) February 1, 2026
The parallel drops show a common cause. Two different asset classes moving together suggests macro liquidity is the real driver. Sector-specific problems are not to blame.
Gold’s recent rally pulled marginal liquidity from the system. This money would have flowed into Bitcoin and SaaS stocks. There was not enough liquidity to support all these assets at once.
The riskiest assets got hit first. Bitcoin and tech stocks fell while gold continued rising.
Government Shutdowns Drain More Liquidity
Two US government shutdowns made the liquidity drain worse. Issues with US financial plumbing added to the problem.
The Reverse Repo Facility drain finished in 2024. Banks and money market funds park cash overnight at the Federal Reserve through this facility.
When the US Treasury rebuilt its cash account before, the negative impact was offset by draining the RRP. Now that the RRP is empty, no offset exists. Treasury cash account rebuilds become pure liquidity drains.
Jeff Mei from BTSE exchange said investors worry about Kevin Warsh as the new Fed chair. They think he may not cut interest rates as fast as expected.
Pal dismissed these concerns. He said Warsh’s job is to run the old Greenspan playbook. This means cutting rates while letting the economy run hot.
Order Book Data Shows Market Manipulation
Keith Alan from Material Indicators said order-book data showed the real story. Persistent sell pressure appeared below $90,000 before the breakdown happened.
FireCharts shows $BTC price is being suppressed by one entity using a liquidity herding strategy to push price lower, potentially to get their own bids filled, or possible to keep price pinned in the lower end of this range before Friday’s options expiry.
A significant amount of… pic.twitter.com/c63miAxBkh
— Material Indicators (@MI_Algos) January 29, 2026
Bitcoin failed to clear $90,000 multiple times in January. This happened even as precious metals and equities hit new highs.
FireCharts tool showed repeated waves of visible sell liquidity above spot prices. This pinned Bitcoin near the lower end of its range.
Alan called this “liquidity herding.” Large orders shape market behavior by pushing price toward levels that benefit the dominant player.
One large participant places sizeable sell orders where everyone can see them. This makes buying appear risky. Buyers hesitate and price drifts sideways or lower.
The tactic uses the order book itself to influence behavior. It often appears around options expiry dates.
Order-book data showed dense bids building between $85,000 and $87,500. This zone absorbed sell pressure and acted as a floor during consolidation.
When Bitcoin slipped below this cluster, selling accelerated rapidly. Thin liquidity made each move bigger. Bitcoin tested lows near $74,000-$76,000 over the weekend.
Alan warned that a monthly close below $87,500 would be a technical failure. He called this scenario “Bearadise” where downside momentum feeds on itself.
Pal said the liquidity drain is almost over. He remains bullish for 2026 based on the Trump, Bessent, and Warsh policy playbook.
