Bitcoin Climbs to $78K as Crypto Market Stabilizes

Key Moments

Bitcoin Regains Ground but Stays Below $80,000

Bitcoin staged a partial recovery on Tuesday, rebounding from levels not seen in nearly 10 months, but the token continued to trade below the key $80,000 threshold amid lingering macro and policy concerns.

The world’s largest cryptocurrency was last up 2.8% at $78,558.4 by 01:42 ET (06:42 GMT), according to the latest trading data.

In the preceding 24 hours, Bitcoin had dropped to $74,635.5, marking its weakest level since early April, as selling pressure intensified and triggered a wave of forced transactions.

Liquidations and Policy Jitters Pressure Bitcoin

The steep weekend downturn was largely attributed to aggressive unwinding of leveraged crypto positions. The move underscored how much speculative exposure had accumulated during last year’s rally in digital assets.

Derivatives analytics indicated that several billion dollars in crypto positions were liquidated in a compressed window, with long positions representing the majority of the forced closures.

Reports indicated that thin market liquidity amplified intraday volatility, allowing relatively modest price moves to cascade into large-scale liquidations as stop-loss orders and margin calls were triggered.

GM ☕️$BTC found support around $78K–$79K and is trying to stabilize after recent sell-offs.

while $ETH is consolidating quietly under pressure but not breaking down hard.
Coffee in hand, charts ahead this is one of those days where patience and positioning matter more than… pic.twitter.com/O9GVq3tPGV

— Snulet 🎴 (@0xSnulet) February 3, 2026

Uncertainty Around Fed Leadership and U.S. Data

Investor sentiment has also been unsettled by broader macroeconomic questions. Market participants are weighing the potential implications of Kevin Warsh’s nomination as the next chair of the U.S. Federal Reserve, a development that has prompted a reassessment of the likely trajectory for interest rates.

Warsh is widely viewed as favouring a more hawkish policy stance, raising concerns that financial conditions might remain tighter for longer.

Adding to the uncertainty, the Bureau of Labor Statistics has delayed the release of January’s closely watched U.S. jobs report, originally scheduled for Friday, due to a partial government shutdown.

Policy Divide on Stablecoin Yields Remains Unresolved

Beyond price action, regulatory friction in the digital asset space remains evident. The cryptocurrency industry and major U.S. banks remain sharply divided over how to oversee yields on stablecoins following a recent White House meeting, underscoring the hurdles to moving forward with long-delayed crypto legislation, according to media reports.

Executives from crypto platforms, representatives from large banks, and government officials convened in Washington to discuss potential market-structure frameworks. However, reports said the group made little headway on a key issue: whether stablecoin issuers should be allowed to offer yield-like products.

Banking institutions have argued that yield-bearing stablecoins could accelerate deposit outflows from traditional accounts and introduce financial stability risks. Crypto firms, in contrast, contend that such yield features are essential for innovation, user adoption, and global competitiveness.

Altcoins Recover; Polygon Leads Gains

Major alternative cryptocurrencies also moved higher on Tuesday, mirroring Bitcoin’s rebound.

Ethereum, the world’s second-largest cryptocurrency, advanced 4.6% to $2,325.92. XRP, the third-largest token by ranking, added 2.1% to trade at $1.61.

Solana rose 3.5%, Cardano gained 5%, and Polygon outperformed with a surge of over 10%. In the meme token segment, both Dogecoin and $TRUMP climbed 3.5%.