“Digital Gold” Loses Its Shine Overnight: Bitcoin and Real Gold Plunge Off a Cliff Together

The Federal Reserve's "hawkish" chairmanship has sent global risk assets on a rollercoaster ride, and the crypto market has heard the crack of bubbles bursting amid liquidity drought.

On January 30, 2026, screens of global investors were stained with blood. Spot silver prices plummeted by as much as 36%, marking the largest single-day decline in history; spot gold prices fell over 12%, briefly dropping below $4,700 per ounce, experiencing the biggest one-day drop in 40 years.

While traditional precious metals markets shattered, the cryptocurrency market was not immune. Bitcoin fell below $82,000, hitting a two-month low, with the entire crypto market experiencing over $813 million in liquidations in a single day.

This was no coincidence but a chain collapse starting from macro factors and ending with structural issues.

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01 Chain Collapse

The epic crash of gold and silver instantly drained liquidity from global risk markets. The market widely believes that the nomination of former Federal Reserve Board member Kevin Woorh by U.S. President Trump as the next Fed Chair was the trigger for this turmoil.

Woorh is known for his hawkish stance, having publicly criticized quantitative easing policies and advocated for closer cooperation between the Fed and the U.S. Treasury. His nomination was interpreted by the market as a signal that future monetary policy might tighten.

Panic in traditional financial markets spread like a tsunami. The dollar index, measuring the dollar against six major currencies, rose 0.73% that day, with a strong dollar directly suppressing dollar-denominated gold and all assets viewed as “risk” or “inflation hedges,” with cryptocurrencies bearing the brunt.

02 Risk Resonance

Under the macro narrative, cryptocurrencies like Bitcoin and traditional risk assets experienced strong resonance. That night, over 200,000 traders' positions were forcibly liquidated.

The fragile internal structure of the crypto market amplified this impact. Since 2026, the U.S. spot Bitcoin ETF has net sold about 4,600 Bitcoins, a stark contrast to the robust net inflow last year.

Meanwhile, on-chain data shows that small transactions (from $0 to $10,000) shrank sharply over the past month, indicating retail investors are retreating from the market. When institutional buying disappears and retail investors exit, the market is left with highly leveraged short-term speculators, sharply increasing volatility.

03 Stablecoin Crisis

Deep cracks in the market had already appeared before the crash. In the third week of January 2026, the stablecoin market experienced a weekly net outflow of up to $3.3 billion.

• Liquidity Evaporation: Stablecoins are the “blood” of the crypto market. After reaching a historic peak of $203.4 billion, their total market cap plummeted to $200.1 billion within a week.

• Trust Erosion: Major stablecoin USDT saw a massive redemption of $1.8 billion in a single day, the highest since the LUNA collapse in 2023; even DAI experienced a brief decoupling of 3.2%.

The drying up of liquidity means the market lost its most important buffer. When sell-offs occur, there are not enough buyers to absorb the pressure, making the decline particularly brutal.

04 Hashrate Winter

Another cornerstone of the crypto world—Bitcoin miners—also suffered a heavy blow during this period. A severe ice storm sweeping across the U.S. caused Bitcoin’s total network hash rate to crash from 1.133 ZH/s to 690 EH/s within two days.

The U.S. accounts for about one-third of global Bitcoin hash rate. Extreme weather caused power outages and soaring electricity costs, forcing large miners like MARA to shut down their machines.

Analysts predict that if the storm persists, miners with sharply reduced income may be forced to sell Bitcoin reserves to cover fixed costs, creating new selling pressure in an already liquidity-tight market.

05 Market Turning Point

Regarding the future, analysts are divided, but most agree that short-term pain is unavoidable.

Market Vulnerability Exposed: This decline revealed the fragile structure of the crypto market under ETF fund outflows, retail retreat, and high leverage. Without new capital inflows, the market will struggle to organize an effective rebound.

Long-term Narrative Unchanged: Despite short-term pressure, the long-term macro narratives supporting cryptocurrencies and gold—such as de-dollarization, geopolitical risks, and distrust in traditional financial systems—have not fundamentally changed. Some institutional analysts believe that international gold prices still have the potential to rise to $6,000 per ounce.

Technical Repair Needs: From a technical perspective, veteran trader Peter Brandt pointed out that Bitcoin has broken below its upward channel since late December 2025. His analysis indicates that unless it recovers above $93,000, the price could test the support level at $66,883.

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On the morning of January 31, market panic eased slightly, and Bitcoin struggled around $82,000. Shaun Dawson, head of research at Derive, a trading platform, pointed out that concerns over “AI overheating” were also an “important driver” of this sell-off.

On Coinbase, one of the world's largest crypto exchanges, Bitcoin trading prices showed a significant discount compared to the global average, with the premium index falling to its lowest in a year, indicating especially strong selling willingness among U.S. investors.

As the safe-haven aura of gold and silver dims due to a nomination, the “digital gold” resonating with them also shivers in the liquidity cold wave. The market waits in pain for the next macro signal to guide it.