Why has the market recently plummeted? Is this the bottom or will it continue to fall? Listen carefully as Cheshire explains.

Since Bitcoin closed lower last October, it has declined for four consecutive months, dropping from a historical high of $126,000 to the current $76,500, with a maximum cumulative decline of 39.3%. Historically, only the declines from July to October 2014 and August 2018 to January 2019 can be compared to this downturn. ETH has been falling for five consecutive months; similar long-term decline periods in history include December 2024 to April 2025, and May to November 2018.

Other cryptocurrencies are also in decline: BNB at $732.26, down 15.9% over 7 days; XRP at $1.54, down 17.7% over 7 days; SOL at $96.9, down 20.5% over 7 days.

Reasons for the market plunge, according to Cheshire:

1. On January 30, 2026, Trump announced on Truth that Kevin Waugh would become the Federal Reserve Chair, stating that Waugh would not disappoint. Waugh may adopt a hawkish stance upon taking office, signaling a shift toward monetarism, tightening monetary policy, and re-emphasizing price stability. As a result, the shrinking of the Fed’s balance sheet and rising interest rates could reduce market liquidity.

2. The major crash on October 11, although over three months ago, still impacts sentiment and effects remain.

3. Lack of liquidity.

Arthur Hayes, co-founder of BitMEX, pointed out that in recent weeks, dollar liquidity has decreased by about $300 billion, mainly due to an increase in the Treasury Department’s General Account (TGA). He believes the government may be increasing cash reserves to prepare for potential spending disruptions, and the decline in Bitcoin aligns with the tightening dollar situation.

Considering recent trends, Bitcoin and Ethereum continue to weaken. Currently, it’s advisable to stay on the sidelines and not rush into trades. In such extreme market conditions, the most important thing is to survive. You can’t change the market, but you can only ensure your own survival. Never give up before dawn.