Bitcoin Falls Below the Key $70,000 Level, Hitting Its Lowest Point in 15 Months

On Thursday, Bitcoin fell below the important psychological threshold of $70,000 due to sharply increased market expectations of potential liquidity tightening under the new Federal Reserve Chairman, Kevin Warsh. Bitcoin briefly fell to $67,619. In less than 48 hours, approximately $40 billion in open interest was liquidated, indicating that a large number of leveraged long positions had been wiped out.

The immediate cause of this decline was the market's reaction to the news of Trump's nomination of Kevin Warsh as Federal Reserve Chairman. Warsh has long been supportive of cryptocurrencies, once calling Bitcoin "new gold," but traders also noted his consistent advocacy for reducing the Federal Reserve's balance sheet—which means withdrawing funds from the market.

Market liquidity is rapidly draining

Outflows from spot Bitcoin ETFs accelerated the decline. The total assets under management of ETFs fell below $100 billion for the first time in the first quarter.

From a technical analysis perspective, $70,000 has been an important line of defense for bulls since 2025. After this level was breached, the support below appears weak, with insufficient buy orders around the mid-$60,000 range.

A striking contrast: gold hit a new all-time high on Thursday, surpassing $5,100 per ounce. Investors are shifting from "high-risk" value storage assets like Bitcoin to "safe-haven" assets like gold. They anticipate that the tightening monetary policy implemented by Warsh will strengthen the dollar and deplete the excess liquidity that fueled the rise of cryptocurrencies.

The Warsh Paradox: Supporting Bitcoin, Opposing Liquidity

This sell-off actually reflects the market's cautious understanding of the "Warsh Paradox." Ordinary investors see a candidate who publicly supports Bitcoin; institutional investors, however, see a Federal Reserve chairman who dislikes quantitative easing policies.

Warsh has explicitly stated that the Federal Reserve's excessively large balance sheet distorts asset prices. Industry experts believe this means the "Fed put option" has expired. Warsh may acknowledge Bitcoin's legitimacy, but he will not inflate its price through money printing. Market volatility is expected to continue until the price of Bitcoin finds a reasonable floor based on actual use, rather than being driven by excessive liquidity.

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