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Fed Reforms Spark Cross-Asset Volatility Spike

Binance

Derivatives

Hyperliquid

Macro

Written by Laurens Fraussen

02/02/2026

    Welcome to the Data Debrief!

    Welcome back to the Data Debrief! 

    The final week of January 2026 delivered a stress test across multiple markets simultaneously. As the Federal Reserve held rates steady at 3.5-3.75% amid leadership transition uncertainty, Bitcoin declined 15% from $88,000 to $74,500, triggering ~$7 billion in liquidations.


    • Macro uncertainty amplified market swings with high volatility on commodities

    • Bitcoin’s 15% collapse, gold’s crypto-like swings, and $7B in crypto liquidations

    • A deep dive into execution quality across venues

    Fed Reforms Spark Cross-Asset Volatility Spike

    On January 28, 2026, the Federal Reserve maintained its target rate at 3.5-3.75%, marking Jerome Powell’s final FOMC meeting as chair. While the decision itself aligned with consensus expectations, market attention rapidly shifted to succession planning. By January 29, reports indicated President Trump would nominate Kevin Warsh, a former Fed governor known for a more hawkish approach.

    Bitcoin, which consolidated between $88,000 and $90,000 for most of January, experienced a sharp breakdown in the 24 hours following the FOMC decision and Warsh speculation. The price declined to $74,500 over the next few days, following a 15% drop that triggered ~$7 billion in liquidations.

    Perhaps the most significant development occurred in precious metals markets. Gold surged past $5,500 on Thursday/Friday before reversing sharply, settling around $4,700-4,800. The reversal came as markets reassessed the Warsh nomination. While initial reactions focused on hawkish policy, Warsh’s reputation as a defender of Fed independence gradually reassured investors. The intraday range exceeded typical annual volatility metrics for the asset. Meanwhile Silver, which typically exhibits 2-3x gold’s percentage moves, showed even more dramatic oscillations with flash crash characteristics observed across multiple venues.

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    Data Used In This Analysis

    Our industry-leading research is the direct result of combining our proprietary data with world-class in-house experts. Bringing the very best of Kaiko’s people and data together, we unlock the unique insights that form the basis for our discoveries and analysis. We believe in doing so, our data speaks for itself, helping both our clients and the wider industry get a better understanding of the crypto ecosystem, and the evolving trends and patterns in motion at a regional and global scale.

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