Cryptocurrency January 26, 2026

Bitcoin Inches Toward One-Month Low Amid Fed Meeting Anticipation and Crypto Market Liquidations

Cryptocurrency markets remain subdued as investors eye Federal Reserve decisions while recent forced sell-offs pressure prices

By Caleb Monroe
Bitcoin Inches Toward One-Month Low Amid Fed Meeting Anticipation and Crypto Market Liquidations

Bitcoin continued to slide near levels not seen in a month, pressured by ongoing risk aversion and sizable liquidations within leveraged cryptocurrency positions. The market remains cautious ahead of the Federal Reserve's policy meeting, where rate decisions and future monetary strategies will be closely examined. Altcoins similarly faced declines, underscoring a broadly weakened crypto market sentiment.

Key Points

  • Bitcoin approached a one-month low amid broad financial market risk aversion and crypto-specific liquidations.
  • More than $1 billion in leveraged cryptocurrency positions were forced closed recently, primarily affecting long Bitcoin holdings, which intensified downward price pressure.
  • The Federal Reserve's forthcoming policy meeting and Chair Jerome Powell's comments are critical to market sentiment, with investors awaiting guidance on future interest rate moves and liquidity conditions.

Bitcoin traded close to a one-month low on Monday, maintaining a downward trend established late last week as investors adopted a cautious stance ahead of the Federal Reserve's upcoming policy announcement and following extensive liquidations in leveraged crypto markets.

As of 03:05 ET (08:05 GMT), the largest digital asset by market capitalization slipped 0.2% to $80,185.6.

Within the past seven days, Bitcoin experienced a decrease exceeding 6%, reflecting a wider risk-off sentiment permeating financial markets. This shift has been driven by growing uncertainty surrounding global monetary policies, notable volatility in foreign exchange rates, and erratic movements in U.S. Treasury yields.

Market data reveal that during the recent turbulence, over $1 billion worth of leveraged cryptocurrency positions were liquidated rapidly, predominantly impacting long Bitcoin holders. Such forced closures intensify selling pressure, often exacerbating downturns as positions are automatically unwound.

Earlier in the year, Bitcoin had seen robust gains supported by expectations of relaxed monetary policy in the U.S. and steady inflows into spot exchange-traded products. However, shifting investor sentiment has led to reassessment of the interest rate outlook, prompting a pullback from risk-sensitive assets amid fluctuating currency and bond market conditions.

Currently, attention centers on the Federal Reserve's two-day meeting culminating on Wednesday. While a decision to maintain current interest rates is widely anticipated, market participants will be closely interpreting Chair Jerome Powell's commentary for insights on the timing and magnitude of possible interest rate reductions later in the year. Investors are also focused on liquidity indicators and the Fed's balance sheet dynamics, key elements influencing cryptocurrency market behavior.

Adding to uncertainty, traders await an anticipated announcement from U.S. President Donald Trump concerning his nominee for the Federal Reserve chair position. This selection could significantly shape forthcoming monetary policies, particularly if the new chair signals alignment with the administration's economic priorities or adopts a more accommodative stance.

On the altcoin front, most major cryptocurrencies also declined on Monday, continuing the recent weak trend amid a cautious investor environment.

  • Ethereum, the second-largest cryptocurrency, dropped 1.5% to $2,897.92.
  • XRP declined by 0.8%, reaching $1.88.
  • Solana decreased 3%, while Cardano and Polygon each fell by 1.5%.
  • Meme tokens showed moderate losses; Dogecoin fell 0.8%, and $TRUMP slid 1%.

The prevailing climate reflects a cautious rebalancing in cryptocurrencies influenced heavily by expectations for U.S. monetary policy developments and the legacies of forced liquidations impacting short-term price movements.

Risks

  • Uncertainty around the Federal Reserve's monetary policy trajectory, including potential interest rate cut timing and scale, introduces volatility to the crypto and broader financial markets.
  • Forced liquidations in leveraged crypto positions demonstrate market susceptibility to rapid price shifts, increasing the risk of abrupt downturns.
  • Pending nomination of the next Federal Reserve chair could lead to shifts in monetary policy direction, adding an additional element of unpredictability for investors.

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