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Tariff wars hit Bitcoin markets after key metric falls to 5-month low |
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News - It's been a bad few days for Bitcoin and the larger crypto market, with the sector reacting to President Donald Trump's imposition of new tariffs on Canada and Mexico. The same was reiterated by the latest market update from QCP Capital, with the firm stating, |
"Market sentiment remains under pressure following Trump's decision to implement tariffs on Canada and Mexico and curb Chinese investment." |
To put it specifically, these tariffs instilled fear among many in the market. Owing to the same, BTC worth over $3.3 billion were sent to exchanges at a loss as short-term holders feared more losses might be incoming soon. |
Liquidations stake their claim - The crypto-market's price performance had a corresponding impact on liquidations across the board. In fact, according to Coinglass, the last 24 hours saw over $1.5 billion in liquidations, with over $1.3 billion in long liquidations alone. |
While Bitcoin did fall to $86.8K on the charts, down almost 20% from its all-time high of over $109.5K, altcoins were similarly affected. Solana [SOL], for instance, lost 12% of its value. The likes of Ethereum [ETH] and XRP fell by over 10% too. |
Here, it's worth pointing out that outside of Trump's latest tariffs, Bybit's recent hack also had an impact on the crypto-market. The hack led to losses of over $1.4 billion and dealt a severe blow to investor confidence across the sector. In fact, such was the scale of this heist that it can be compared to the $1 billion theft from the Central Bank of Iraq in 2003. |
In the aftermath of these episodes, investors are withdrawing their funds from exchanges to avoid exposure. Owing to the same, liquidity is drying up and by extension, sell-offs are being fueled. |
New predictions for 2025? - The last 48 hours have had a major impact on a few key metrics associated with the health of Bitcoin and the wider crypto-market. The Fear & Greed Index, for instance, fell to a 5-month low and flashed signs of "extreme fear." |
This, on the back of capital inflows into the market slowing down. In fact, these have fallen by over 50% in the last 10 days alone. |
As expected, this has encouraged many to revise their projections and predictions for the year. CryptoQuant, for instance, now believes that institutional demand from corporations like MicroStrategy will be limited in the near term. Especially since apparent demand for BTC fell into the negative zone for the first time since October 2024. |
Also, according to BitMEX Co-founder Arthur Hayes, low demand for BTC might pull it down to $70,000 on the price charts thanks to the CME Basis Yield. |
Ethereum's Pectra upgrade faces finalization issues after testnet launch |
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Pectra went live on the Holesky testnet on 24 February. Contrary to expectations though, it failed to finalize.
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News - Ethereum's Pectra upgrade was shipped out to the Holesky testnet on 24 February after much anticipation. However, all didn't go as planned as it failed to finalize in the expected time. |
The upgrade faced finalization issues - A phase where all nodes must reach a consensus on the blocks produced to make them immutable. |
This is the second time in just over a year that an upgrade has faced issues on an Ethereum testnet. In fact, back in January 2024, the Dencun upgrade didn't quite finalize on the Goerli testnet. |
What really happened? - According to some Ethereum developers familiar with the matter, the issue arose thanks to a misconfiguration on major execution clients, including Geth, Nethermind, ETHjs, and Besu. |
Others like Paradigm's CTO Georgios Konstantopoulos also highlighted a bug linked to the Deposit Contact Address (CA) for the Pectra upgrade. |
This upgrade aims to introduce 11 new updates related to user experience, blob scaling, and smart wallet functionality. These are intended to improve the network's scalability, especially in the face of competition from the likes of Solana. |
Pectra is now expected to go live on the Sepolia testnet on 05 March. However, in lieu of the aforementioned issues, there is no saying what impact, if any, there will be on the timeline now. According to the Vice President of Research at Galaxy, Christine Kim, |
"Devs are troubleshooting what the issues are. depending on the scale of the bugs, devs could delay the Sepolia fork. if they do, they'll discuss this on the next ACD call happening this Thurs." |
Not all bad news - Despite this latest setback and its troubles on the price front, it hasn't been all gloom and doom for Ethereum. One of the biggest bullish cues is the fact that over the past year, "10K-100K ETH address balances grew by 24%." |
Additionally, Glassnode's Cost Basis Distribution data revealed that despite significant volatility on the charts, ETH's accumulation trend has been fairly positive lately. |
Bybit CEO calls for 'war against Lazarus' after $1.4 billion hack |
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North Korea-affiliated group stole $1.4 billion in liquid staked Ether, mETH, and other ERC-20 tokens on 21 February. Lazarus Group has stolen over $3 billion in cryptos over the last 7 years.
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News - While it's too soon to say when the crypto-market will fully recover from the effects of the Bybit hack, the exchange itself is well on its way now. In fact, according to a recent statement from Bybit, the exchange has already replaced all its stolen crypto. |
"Back to 100% 1:1 on client assets," it said. |
However, that's not all. In fact, Bybit is now actively on war footing, with its CEO Ben Zhou in the news today after he called on users to "support a war against Lazarus." |
Hunting season is here - Days after the aforementioned hack, the exchange has now announced a bounty website. According to the same, anyone who freezes illegally moving funds will receive 5% of crypto as a result of their efforts. Additionally, |
"Successful interceptions will be rewarded with a 10% bounty" — potentially up to $140 million." |
Zhou also claimed that the exchange has assigned a dedicated team to not only update this website, but also to work towards eliminating other bad actors in the industry. |
"Let the hunting season begin," he concluded. |
On the road to recovery - Within days of the hack, there has been a gradual incline in Bybit's ETH reserves. Figures for the same are now well above 200,000 ETH - Far more than the 36K ETH in the immediate aftermath of the hack. |
This means the exchange actively replenished its Ethereum holdings in an attempt to meet liquidity demands and to restore market confidence. This can be interpreted as a sign that the worst may be over. Not just for the exchange, but for the altcoins involved too. |
United States' SEC drops its investigation into Uniswap Labs |
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News - Less than a year after it received a Wells Notice from the U.S Securities and Exchange Commission, Uniswap Labs has now announced that this investigation is over. According to the firm, no enforcement action will be taken either. |
Back in April 2024, the SEC accused Uniswap Labs of operating as an unregistered broker, operating an exchange, and issuing an unregistered security. |
The SEC's notice back then was just another in a series of enforcement actions directed against crypto entities. The likes of Coinbase and Binance have also been targeted by the SEC in the past. |
'Huge win for DeFi' - At this moment, it's not clear why the investigation into Uniswap Labs was dropped. However, as expected, the update was welcomed by many across the industry. For its part, the firm claimed, |
"This is a huge win for DeFi and reaffirms what we've always known – that the technology we build is on the right side of the law, and our work is on the right side of history." |
It can be guessed, however, that this latest development has to do with the new SEC and its interpretation of digital asset regulations and the need for enforcement actions. |
Contrary to the Gary Gensler-led SEC, the new SEC under the Trump administration is more open to crypto as an asset class. Encouraged by President Trump, the agency is now keen on removing all "regulatory impediments" at the SEC. |
An evolving SEC - The SEC's recent efforts towards the same can be evidenced by the fact that its task force had discussions with representatives of several crypto firms over the past few weeks. A recent Reuters report even claimed that the agency might drop all investigations that don't involve fraud. |
Like in the case of Uniswap Labs, the SEC has also closed its investigation into the likes of Coinbase and OpenSea. |
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More stories from the crypto ecosystem |
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Did you know? |
WikiLeaks used Bitcoin donations to get past sanctions and restrictions imposed on it by banking giants in 2010. A few years later, Founder Julian Assange thanked the U.S government since the company's BTC investments accrued returns of over 50000%. In 2021, a hamster named Mr. Goxx used an "intention wheel" to select cryptocurrencies. Whenever the hamster used to run through certain tunnels, these cryptos would either be sold or bought. Until his death a year later, the hamster had seen a 20% return on its investments. 2018 saw the World Bank issue the first-ever blockchain-based bond, in collaboration with the Commonwealth Bank of Australia. Known as 'bond-i' (Blockchain Offered New Debt Instrument), it raised $110 million.
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Top 3 coins of the day |
Maker (MKR) |
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Key points: |
At press time, MKR was trading at $1,717 after climbing by 22% in 24 hours. Altcoin may soon climb to hit its December highs.
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What you should know: |
The wider cryptocurrency market saw its fortunes fall over the last 24-48 hours. However, that wasn't the case as far as MKR was concerned. In fact, MKR was an anomaly even before the latest market downturn, as February has been one of its most profitable months in recent history. The last 2 days alone saw the altcoin hike by over 22% on the charts. Thanks to the same, at press time, MKR was the market's biggest gainer. The cryptocurrency's technical indicators highlighted the scale of its recent bullishness. For instance, while the mouth of the Bollinger Bands expanded to hint at incoming volatility, the Chaikin Money Flow climbed to 0.20 to underline positive capital inflows. |
Polkadot (DOT) |
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Like MKR, DOT's latest hike was inconsistent with the larger market's performance. However, February hasn't been as profitable for this altcoin.
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What you should know: |
As the crypto market stabilized somewhat and stemmed its losses, Polkadot [DOT] rallied on the charts. In fact, the altcoin climbed by just under 12% to emerge as one of the market's biggest gainers, at press time. Despite the hike, however, the altcoin is still trading within a tight price range on the price charts. DOT has been stuck in the same for a few weeks now. Hence, a definitive uptrend will depend on how and when DOT breaches this range. Signs were fairly bullish though, with the same evidenced by the positioning of the Moving Average below the price candles. Similarly, the RSI was just above the point of equilibrium - A sign that there's room for still more buying pressure in the market. |
TRON (TRX) |
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What you should know: |
Like a majority of the crypto market, TRON [TRX] tanked on the charts as President Trump's Mexico, Canada tariffs, the Bybit hack, and increasing liquidations took their toll. In fact, the downturn saw TRX lose almost 9% of its value on the charts. Now, at press time, the altcoin had recovered somewhat. However, there is still a long way to go before full recovery can ensue. The timing here is especially interesting since the downturn came within a day of the network announcing that it saw a significant drop in illicit USDT transactions on the blockchain. This update had little impact on TRX's own performance. On the technical indicators front, most still seemed to be leaning bearish. While the MACD like was well below the Signal line on the charts, the Parabolic SAR's dotted markers highlighted bearishness with their position above the price candles. |
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