Why Are Markets Falling? 3 Assets to Watch Amid Plunging Prices: Feb 2-6, 2026
Markets are a sea of red on the first trading day of February 2026:
Bitcoin (BTC/USDTX) has sunken to its lowest levels since April 2025, back when markets were still digesting the aftermath of President Trump's trade tariffs announced on "Liberation Day".
The SP500 has dropped over 2% since posting a new all-time high last week.
Gold (XAUUSD+) and Silver (XAGUSD) have erased much of their respective year-to-date gains, which now stand at about 5% at the time of writing.
Monday's (Feb 2) selloff are extending last Friday's dramatic fall. Jan 30th saw silver's biggest-ever intraday decline, while it was Gold's biggest intraday decline since the early 1980s
For seasoned market watchers, this pullback brings these precious metals' prices to more sensible levels, after their mind-blowing surge last month (Jan 2026).
Why are markets tumbling?
Once again, President Trump was the catalyst.
Rumours began swirling in the latter part of last week, before confirmed by Trump's post on Truth Social, that the President has made a surprise choice for the Federal Reserve's new top boss.
Kevin Warsh - if confirmed by the Senate - will replace Jerome Powell as Fed Chair when the latter steps down in May.
Warsh is known for his "hawkish bias" in the past (preference for higher US interest rates) and was also a fierce critic of the Fed's balance sheet expansion, which now stands at around US$ 6.6 trillion.
As we had mentioned this past Friday (Jan 30th):
" ... the idea of a less-dovish Fed Chair prompted a repricing across major asset classes ..."
READ MORE: 3 Reasons Why Markets Are Falling (published Friday, Jan 30)
Even amidst falling markets, there are still many trading opportunities, be it to go "short" (sell first, then buy back later to bet that prices will fall further), or "buy the dip" with hopes that prices will rebound.
At this dramatic onset of this new week/month, here are 3 key assets to watch:
1) Gold to rebound off widely-followed technical indicator?
This is the first time gold prices has touched this widely-followed technical indicator since August 2025.
Even as markets digest the prospects of Fed Chair Warsh ...
Watch the ever-important US monthly jobs report due this Friday, Feb 6th.
DOWNSIDE SCENARIO: If Gold's 50-day SMA fails to offer crucial support, bears may target the 100-day SMA, or even $4350 if the selling momentum is extended.
UPSIDE SCENARIO: If Gold's 50-day SMA holds, Gold may reclaim its 21-day SMA.
2) Amazon stocks forecasted to move 7% up/down after earnings
This tech giant and AI behemoth is set to announce its latest quarterly results after US markets close on Thursday, Feb 5th.
Once its Q4 financials have been released, Amazon stocks are forecasted to move 7% up/down.
We will share more key info and finer details in our Daily Bits on Thursday, Feb 5th.
3) Bitcoin to rebound off April low? Or sink to 2024 levels?
At the time of writing, Bitcoin is rebounding off those April 2025 lows.
DOWNSIDE SCENARIO: If BTC fails to hold around that $74,500 crucial support, prices may next move to the $70k big, round number for pyschological support - levels not seen since early November 2024.
UPSIDE SCENARIO: If BTC's current prices entices a wave of "dip-buying", the world's oldest and biggest crypto may then return to the $82k - $84k region.