Bitcoin plummeted to $82,134 as a global risk-off sentiment swept across financial markets, according to Decrypt. This decline marked its lowest level in nine months, driven by macroeconomic and geopolitical factors. Over a 24-hour period, Bitcoin shed 7.4%, contributing to a $1.75 billion liquidation event in the crypto space. The total crypto market capitalization fell by 6.7%, resulting in $1.68 billion in liquidated positions.

The selloff was exacerbated by policy shifts in Washington. U.S. President Donald Trump's anticipated announcement of his next Federal Reserve Chairman nominee, reportedly former Fed Governor Kevin Warsh, loomed large over the markets. Sources told Reuters that Warsh met with Trump at the White House, and market participants expect him to take a hard stance on inflation, which analysts believe could be bearish for Bitcoin in the short term.

Trump's executive order declaring a national emergency also added pressure, as it outlined a process for tariffs on countries that sell oil to Cuba. This, combined with escalating tensions over potential U.S. interventions in Iran and ongoing conflicts in the South China Sea and Ukraine, triggered a flight to safety across both crypto and equity markets.

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According to Velo data, Bitcoin's open interest saw a notable increase since Wednesday, despite a decline in futures and spot volume. This suggests that selling pressure from both perpetual and spot investors contributed to Bitcoin's drop. Moreover, investors in the options market are positioning for a potential crash to the $70,000 to $75,000 range, as indicated by a 30-day Bitcoin skew hovering at -12%, highlighting a premium for downside protection.

While Bitcoin showed a slight recovery of 1.1% within the hour, trading at $82,850, the early Asian trading session indicated some signs of recovery in equity markets. This uptick followed Trump's endorsement of a Senate deal to fund the majority of the federal government, easing some near-term political uncertainty. Yet, as Sean Dawson, head of research at Derive, noted, the market faces a challenging start to February, with the positive effects of regulatory discussions unlikely to translate into immediate price increases.

The current climate reflects a broader trend of caution among investors, with geopolitical tensions and regulatory uncertainties creating a volatile environment. The combination of these factors suggests that Bitcoin and other cryptocurrencies may continue to face headwinds in the near future. As the market reacts to unfolding events, traders should brace for potential volatility, as the implications of these developments resonate across global financial markets.