This Week’s Recap
Bitcoin led this week’s market movements as it dropped to a three-week low of $91,441, following the announcement of new U.S. tariffs on China, Mexico, and Canada. The 25% tariffs on Mexican and Canadian goods and 10% on Chinese imports triggered fears of a global trade war, leading to a broader selloff across financial markets. Canada and Mexico vowed retaliatory measures, while China plans to challenge the tariffs at the WTO, adding further uncertainty. The sharp reaction extended to the crypto market, with Ether and other major assets also declining, reflecting how macroeconomic policy continues to impact digital asset valuations.
Regulatory discussions were also in focus as the FDIC released 175 internal documents revealing how regulators have resisted banks engaging in crypto activities. These documents highlight patterns of delays, additional scrutiny, and restrictions on blockchain-related expansion, reinforcing concerns over debanking practices. The timing is crucial as the Senate Banking Committee is set to hold a hearing on the issue, which could determine whether regulatory pressure on crypto-friendly banks will ease or intensify. Meanwhile, U.S. lawmakers introduced the GENIUS Act, a stablecoin regulatory framework aimed at distinguishing between large issuers (over $10 billion market cap), who would be regulated by the Federal Reserve, and smaller issuers, who would remain under state oversight. With stablecoins playing a key role in DeFi and tokenized finance, this bill could provide greater legal clarity and help boost institutional adoption. At the same time, Coinbase renewed its push for crypto banking reforms, urging U.S. regulators to remove barriers preventing banks from integrating digital asset services. The exchange argues that a clearer regulatory landscape is needed to allow U.S. financial institutions to remain competitive in the global crypto space.
Despite the uncertain regulatory climate, institutional players continue expanding into digital assets. BlackRock announced plans to launch a Bitcoin Exchange-Traded Product (ETP) in Europe, expected to be domiciled in Switzerland. This signals growing institutional demand for Bitcoin exposure outside the U.S., following the approval of spot Bitcoin ETFs in American markets. Similarly, Grayscale has moved forward with its plans for an XRP ETF, filing with the SEC to convert its XRP Trust into an exchange-traded fund. This filing reflects rising confidence in XRP’s long-term investment viability, despite ongoing legal uncertainties surrounding the asset. Analysts suggest that if the SEC establishes a clear regulatory framework for XRP, Solana, and Dogecoin, it could unlock a wave of new crypto ETFs, further integrating digital assets into traditional finance.
Meanwhile, blockchain infrastructure saw a major upgrade as Ethereum increased its gas limit to 32 million gas units per block, marking its first adjustment since the Merge. This upgrade allows for more transactions per block, improving network scalability and transaction efficiency. The timing is critical, as real-world asset (RWA) tokenization gains traction and institutional players increase exposure to blockchain-based financial products. Wall Street is now eyeing a $30 trillion RWA tokenization market, seeing blockchain technology as a solution for unlocking liquidity in traditional financial assets. In 2024 alone, tokenized Treasurys surged by 179%, while private credit markets grew by 40%, underscoring the growing institutional appetite for blockchain-powered financial products. The total market for tokenized real-world assets hit an all-time high of $17 billion, reinforcing blockchain’s potential beyond just cryptocurrency.
Corporate strategies also saw notable shifts, with MicroStrategy halting its aggressive Bitcoin accumulation, maintaining its holdings at 471,107 BTC worth $30 billion. The pause comes as the company prepares for its Q4 earnings report, with analysts watching closely to assess whether its Bitcoin strategy remains sustainable amid market volatility. Globally, regulatory policies continue evolving, as India imposed a 70% tax penalty on undisclosed crypto gains, applying retroactively over the past four years. This move signals India’s reconsideration of its crypto policy, potentially adjusting its stance based on international regulatory trends.
The week’s developments highlight how macro policies, regulation, and institutional interest continue shaping the crypto market. While short-term volatility persists, the long-term trend remains focused on the increasing integration of digital assets into mainstream financial infrastructure.
Crypto Headlines & Industry Updates
Bitcoin drops to 3-week low as Trump tariffs rattle markets
Bitcoin fell to a three-week low of $91,441.89 as markets reacted to new U.S. tariffs on Mexico, Canada, and China. The tariffs, set at 25% on Mexican and Canadian goods and 10% on Chinese imports, triggered fears of a global trade war, prompting market-wide selloffs. Canada and Mexico vowed retaliation, while China plans to challenge the tariffs at the WTO. The uncertainty led to a sharp decline in cryptocurrencies, with Ether also dropping.
FDIC Releases Extensive Crypto-Related Documents, Including ‘Operation Chokepoint 2.0’ Files
The Federal Deposit Insurance Corporation (FDIC) has released 175 internal documents detailing its oversight of banks engaged in crypto-related activities. These documents reveal patterns of resistance from regulators, with banks facing delays, repeated requests for additional information, and directives to pause or refrain from expanding blockchain and crypto-related operations.
Senator Bill Hagerty, along with co-sponsors Senators Tim Scott, Kirsten Gillibrand, and Cynthia Lummis, has introduced the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The bill aims to establish a clear regulatory framework for payment stablecoins, enabling faster and more competitive transactions and facilitating seamless cross-border payments. It proposes that stablecoin issuers with market caps above $10 billion comply with Federal Reserve regulations, while smaller issuers would be regulated by the states.
BlackRock to Launch Bitcoin ETP in Europe
BlackRock, the world’s largest asset manager, is preparing to launch a Bitcoin exchange-traded product (ETP) in Europe within weeks. The product is expected to be domiciled in Switzerland.
Ethereum Increases Gas Limit, Enabling More Transactions Per Block
The Ethereum network has implemented its first gas limit increase since the Merge, raising the limit to 32 million gas units, with expectations of expanding to 36 million. This adjustment allows for more transactions per block, enhancing the network’s scalability and efficiency.
Coinbase Urges US Regulators to Remove Crypto Banking Barriers
Coinbase has renewed its call for U.S. banking regulators to clarify their stance on banks offering cryptocurrency services and forming partnerships with digital asset companies. The exchange emphasizes that clear regulatory guidelines are essential for fostering innovation and maintaining the country’s competitive edge in the digital asset space.
MicroStrategy Halts Bitcoin Purchases, Holding 471,107 BTC Worth $30B
MicroStrategy has paused its Bitcoin acquisition strategy, currently holding 471,107 BTC valued at approximately $30 billion. This decision comes as the company prepares to report its fourth-quarter earnings, with expectations of adjusted earnings at 5 cents per share on $122.4 million in sales, a decrease from the previous year. Despite its massive Bitcoin inventory, the company lacks recurring earnings based on GAAP, and its software business is not profitable.
Wall Street Bets on $30T RWA Tokenization Market Prospects
Major financial institutions on Wall Street are increasingly investing in the tokenization of real-world assets (RWAs), a market projected to reach $30 trillion. Tokenization involves converting physical and traditional financial assets into digital tokens on a blockchain, offering enhanced liquidity and accessibility. In 2024, tokenized Treasurys surged by 179%, while private credit grew by 40%, indicating significant growth and interest in this sector.
Tokenized Real-World Assets Hit All-Time High of $17 Billion
The market for tokenized real-world assets has reached a record high, with a total valuation of $17 billion. This growth reflects the rising adoption of blockchain technology in representing physical assets digitally, providing investors with new opportunities for diversification. The increase in tokenized assets is seen as a positive development in the integration of traditional financial assets with blockchain technology.
Grayscale Seeks XRP ETF Approval and Files SEC Proposal to Convert XRP Trust into ETF
Grayscale Investments has filed an application with the U.S. Securities and Exchange Commission (SEC) to convert its XRP Trust into an exchange-traded fund (ETF). The proposed ETF aims to list on the New York Stock Exchange (NYSE) and would hold XRP as its primary asset, tracking its performance on a price return basis. This move reflects growing institutional interest in structured investment products for XRP.
The Indian government has announced a 70% tax penalty on undisclosed cryptocurrency gains as part of new regulations under Section 158B of the Income Tax Act. This measure applies retroactively to gains from the past four years and classifies cryptocurrencies under the same tax treatment as traditional assets like money, jewelry, and bullion. The move indicates a potential policy shift as India reassesses its stance on digital assets in response to global trends.
Crypto ETF Floodgates May Open if SEC Regulates XRP, Solana, and Dogecoin
Analysts suggest that the approval of regulatory frameworks by the SEC for cryptocurrencies such as XRP, Solana, and Dogecoin could lead to a surge in cryptocurrency exchange-traded funds (ETFs). The SEC has previously emphasized the importance of regulated futures markets for crypto ETF approvals. Clear regulatory guidelines could encourage the development of ETFs, providing investors with more avenues to invest in digital assets through traditional financial instruments.
Bitcoin Market Analysis
Over the past week, Bitcoin has experienced significant volatility, reaching an all-time high of $106,000 before facing strong rejection and dropping below $100,000. On February 3, the market witnessed a flash crash following the announcement of new U.S. tariffs, triggering widespread panic selling and leverage wipeouts. Bitcoin rapidly dropped to $91,500, causing a cascade of 730,000 trader liquidations with over $2.2 billion in positions wiped out. The sudden drop mirrored previous major liquidation events, such as December 2024’s drop to $92,000, though this time, both spot and derivatives markets were heavily affected. While Bitcoin briefly reclaimed $100,000 on February 4, reaching an intraday high of $102,615, it failed to sustain momentum, leading to continued selling pressure. As of February 6, Bitcoin is trading around $97,473, reflecting a 0.775% decline from the previous close.
Source: https://altfins.com/technical-analysis
The massive leverage wipeout, as shown in CryptoQuant’s Long Liquidations Chart, highlights one of the largest liquidation spikes in recent history. Excessive leverage had built up in the market, particularly from traders using high-margin long positions, amplifying price swings. As Bitcoin’s price dropped below key liquidation levels, forced sell-offs accelerated, causing an open interest trend breakdown. This event effectively reset the derivatives market, flushing out speculative excess and reducing the likelihood of further cascade liquidations. Historically, these market-cleansing events have often marked local bottoms, as weaker hands exit and stronger hands accumulate.
Source: https://cryptoquant.com/
Technical indicators point to weakening momentum. The MACD remains in a bearish crossover, with the MACD Line below the Signal Line, indicating a shift in momentum. The RSI (14) at 44.30 suggests that Bitcoin is neither overbought nor oversold, but the downward trajectory signals caution. Trading volume remains moderate at 7.78K, and the 200-day SMA at $78,372 remains an important long-term support level. Bitcoin is now approaching the $90,000 support zone, which has previously acted as a key level where demand resurges. Should this support fail, $72,000 – $74,000 represents the next major support range. On the upside, $100,000 remains a crucial resistance level, followed by $108,000, where Bitcoin was previously rejected.
Beyond price action, on-chain metrics indicate a market reset. The Realized Profit and Loss chart from CryptoQuant shows heavy realized losses, confirming that traders closed positions at a loss during the flash crash. However, exchange reserves have declined, signaling that long-term holders continue moving Bitcoin into self-custody rather than selling. Miner accumulation remains stable, indicating no immediate risk of miner-driven selling pressure. The leverage reset has also de-risked the market, reducing the likelihood of further sudden liquidations and allowing for a more stable price structure.
Source: https://cryptoquant.com/ | @caueconomy
Historically, major liquidation events often mark cycle lows, as they reset speculative excess and pave the way for healthier market conditions. The “blood in the streets” moment has flushed out weaker hands, while stronger investors accumulate at lower levels. While peak fear has likely been reached, price discovery remains uncertain. The $90,000 support level and $108,000 resistance zone will dictate the next major move. If leverage remains low and buy-side interest strengthens, this structural reset could form the basis for a more sustainable recovery in the coming weeks.
Source: https://cryptoquant.com/
Ethereum (ETH) is exhibiting bearish signals after breaking down from a typically bullish falling wedge pattern and falling below its 200-day moving average, suggesting a potential downtrend. The analyst forecasts a possible price target of $2,400, with short-term and medium-term trends confirming the bearish outlook. A MACD crossover further reinforces the sell signal, while key support levels are identified at $2,800 and $2,400, and resistance levels at $3,200 and $3,550. While the RSI doesn’t indicate overbought or oversold conditions, this analysis points to a bearish outlook for ETH in the near term.
Source: https://cryptoquant.com/
XRP presents a mixed picture. While the long-term trend is strongly up and the medium-term trend is up, a recent failed breakout above $3.00 and subsequent pullback to the $2.50 support level has created a short-term downtrend. This pullback, however, is viewed by the analyst as a potential buying opportunity, anticipating a 20% upside back to $3.00. The analyst suggests a stop-loss at $2.73. Despite the bearish short-term momentum indicated by the MACD crossover, the RSI doesn’t signal overbought or oversold conditions. Key support levels are at $2.00 and $1.63, while resistance levels are at $3.00 and $3.84. The analyst also notes the potential dissipation of regulatory pressure from the SEC under the new administration, and XRP’s price reaching levels unseen since 2021.
Other Analysis and Commentaries
@rektcapital pointed out what to watch out for when predicting when Altseason will come.
@100trillionUSD tweeted that February to May this year might produce a 40% gain for Bitcoin.
@intocryptoverse tweets about how the bottom for ETH is in as ETH/BTC bottoms with ETH supply returning to pre-merge levels.
Mark Your Calendars
Economic Data Releases:
- February 7, 2025 (Friday): The U.S. Bureau of Labor Statistics will publish the Employment Situation report for January 2025 at 8:30 AM Eastern Time. This report provides insights into employment trends, including nonfarm payrolls and the unemployment rate.
- February 12, 2025 (Wednesday): The Consumer Price Index (CPI) for January 2025 will be released at 8:30 AM Eastern Time. The CPI measures changes in the price level of a basket of consumer goods and services, serving as a key indicator of inflation.
- February 13, 2025 (Thursday): The Producer Price Index (PPI) for January 2025 is scheduled for release at 8:30 AM Eastern Time. The PPI measures the average change over time in the selling prices received by domestic producers for their output, providing insights into inflation at the wholesale level.
Cryptocurrency Events:
- February 12-13, 2025: The Arabian Blockchain and Crypto Expo Dubai 2025 will take place in Dubai. This event is a significant networking and exhibition opportunity for the crypto, blockchain, and Web3 industries, attracting participants from various regions.
Token Unlock
February 10, 2025:
- MOVE: 30.37M tokens (2.13% of circulating supply), valued at approximately $30.37M, will be unlocked. This could impact the token’s price due to an increase in available supply.
February 12, 2025:
- ATH: 22.97M tokens (10.21% of circulating supply), worth around $25.17M, are set to unlock. Given its high unlock percentage, price volatility is expected.
February 14, 2025:
- SAND: 81.39M tokens (8.41% of circulating supply), with an estimated value of $81.39M, will be unlocked. The large supply release may lead to market adjustments.
- STRK: 16.07M tokens (2.48% of circulating supply), worth around $16.07M, will be unlocked. Investors should watch for price fluctuations.
