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Ethereum enters security-first phase as market pressure builds |
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Key points: |
Ethereum is moving into a period of tighter spending and expanded security funding while continuing to prioritize privacy and core infrastructure development. ETH price weakness has pushed key support levels into focus ahead of February, increasing downside risk if recovery levels fail to hold.
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News - Ethereum is entering a period marked by reduced discretionary spending at the foundation level, renewed security funding, and a stronger focus on privacy preserving infrastructure, according to recent disclosures from core contributors. These developments are unfolding alongside a broader market drawdown for ETH. |
Vitalik Buterin confirmed that he has withdrawn 16,384 ETH, valued between $43 million and $45 million, from personal holdings to support privacy focused technologies, open hardware, and verifiable software systems. The capital is set to be deployed gradually over the coming years and may be supplemented through decentralized staking strategies. |
Buterin described the move as aligned with the Ethereum Foundation entering a period of mild austerity while continuing to pursue its core technical roadmap. |
At the same time, unclaimed Ether tied to the 2016 DAO collapse is being redirected into a community governed security endowment. Roughly 75,000 ETH, now valued near $220 million, will be staked to fund audits, tooling, and incident response through decentralized grant mechanisms. The initiative converts leftover assets from Ethereum's earliest crisis into a long-term funding source for ecosystem defense. |
Market stress adds urgency - While development and security initiatives accelerate, ETH price action remains under pressure. Ethereum fell by nearly 7% in January and recently slipped below the $2,800 support zone, a level that had held since early December 2025. ETH now trades near $2,700 as it enters February at a critical juncture. |
Technical structures point toward further downside risk if recovery attempts fail. Key support sits near $2,690, while a deeper move could open downside toward the $2,500 level and the $2,100 to $2,150 region. On the upside, ETH would need to reclaim $3,000 to signal improving market confidence. |
Onchain data supports a cautious stance. Ethereum's Net Unrealized Profit Loss metric has shifted into the fear zone, a phase that has historically aligned with extended drawdowns. Veteran trader Peter Brandt said the burden of proof now rests with bulls after ETH broke below its lower trendline. |
Why it matters - Ethereum's price structure remains fragile, but recent funding plans and community led distribution mechanisms show that security, privacy, and long-term resilience remain central priorities as the network navigates ongoing market pressure. |
Trump's Fed pick Kevin Warsh rattles markets, raises crypto questions |
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Key points: |
Donald Trump's nomination of Kevin Warsh as the next Federal Reserve chair triggered market volatility, with Bitcoin briefly sliding toward $81,000. Warsh is widely viewed as emphasizing monetary discipline, while his past comments and investments show a more mixed stance toward crypto.
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News - US President Donald Trump has nominated former Federal Reserve governor Kevin Warsh to replace Jerome Powell as Fed chair when Powell's term ends in May. The decision, confirmed via Trump's Truth Social account, sets the stage for a Senate confirmation process and a potential shift in US monetary leadership. |
Markets reacted swiftly. As betting odds for Warsh's nomination surged on prediction platforms, risk assets sold off, with Bitcoin falling toward the $81,000 level before stabilizing. Some analysts attributed the move to concerns that Warsh's emphasis on monetary discipline could translate into higher real interest rates and tighter liquidity. |
Warsh previously served on the Federal Reserve Board from 2006 to 2011 and has been a consistent critic of prolonged quantitative easing and balance sheet expansion. His record during the global financial crisis contributed to his reputation as an inflation hawk, though supporters argue that this characterization does not fully reflect his views across different periods. |
Hedge fund billionaire Stanley Druckenmiller pushed back on the idea that Warsh is always hawkish, saying he has seen him support different policy approaches at different times and calling him uniquely equipped for the role. Druckenmiller also highlighted the importance of alignment between Warsh and Treasury Secretary Scott Bessent, describing cooperation between the two as ideal. |
Where crypto fits in - Warsh's public record on crypto reflects both support and caution. He has invested in crypto-related projects such as the algorithmic stablecoin initiative Basis, invested in crypto asset manager Bitwise, and served as an adviser to blockchain focused venture firm Electric Capital. |
In past remarks, Warsh said Bitcoin could provide market discipline and function as a store of value, while also arguing it is unsuitable as a medium of exchange. |
At the same time, Warsh has repeatedly called for clearer regulatory frameworks around stablecoins and has expressed support for a wholesale central bank digital currency limited to interbank use rather than retail adoption. |
Why it matters - In the near term, Warsh's nomination has added volatility to risk assets, including crypto. Over a longer horizon, his preference for monetary discipline alongside clearer stablecoin rules could shape how crypto markets respond if interest rate cuts resume later in 2026. |
Binance moves $1B SAFU Fund into Bitcoin, shifting user protection strategy |
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Key points: |
Binance will convert the $1 billion Secure Asset Fund for Users from stablecoins into Bitcoin within 30 days, citing long term conviction in BTC. The move increases SAFU's exposure to Bitcoin volatility, changing how user protection reserves behave during market stress.
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News - Binance has announced plans to reallocate its $1 billion Secure Asset Fund for Users entirely into Bitcoin over the next 30 days, marking a major shift in how the exchange backs its emergency user protection reserve. The decision was outlined in an open letter to the crypto community and framed as part of Binance's long-term industry building strategy. |
SAFU, launched in 2018 and funded by a portion of trading fees, is designed to reimburse users in extreme situations such as hacks or critical platform incidents. Binance said it will monitor the fund's market value and rebalance it back to $1 billion if Bitcoin price swings push it below $800 million. The exchange also committed to conducting regular audits of the fund. |
Previously, SAFU was held in stablecoins. In 2024, Binance transitioned the fund from BUSD into USDC following the wind down of its branded stablecoin. The latest move removes stablecoin exposure entirely, aligning user protection reserves with Bitcoin, which Binance described as the core long-term asset of the crypto ecosystem. |
What changes for risk management - Moving SAFU into Bitcoin introduces direct exposure to BTC price volatility. While the rebalancing mechanism is designed to restore the fund's market value to $1 billion, the reserve will fluctuate alongside Bitcoin prices, potentially reducing the buffer during periods when rapid user reimbursements are required. |
Binance said the Bitcoin will be custodied within its licensed clearing house entity regulated by the Abu Dhabi Global Market. Users can also verify the SAFU fund onchain. |
Bigger picture - Binance already holds more than 648,000 BTC to support trading activity, liquidity, and user balances. Converting SAFU into Bitcoin would place roughly 12,000 BTC into a single purpose reserve, making it one of the largest Bitcoin denominated user protection funds in the industry. |
Alongside the SAFU announcement, Binance highlighted its 2025 risk control and compliance efforts, including recovering $48 million in misdeposited funds, helping prevent $6.69 billion in scam-related losses, and verifying $162.8 billion in fully backed user assets through proof of reserves. |
US seizes $400M from Helix, closing major Bitcoin mixer case |
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Key points: |
US Department of Justice has finalized the forfeiture of more than $400 million in assets tied to the darknet Bitcoin mixer Helix. The ruling reinforces growing legal risks for crypto services built to facilitate illicit financial activity.
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News - The US Department of Justice has completed the forfeiture of over $400 million in cryptocurrency and other assets linked to Helix, an early Bitcoin era mixing service widely used by darknet marketplaces. A final court order entered on January 21 transferred legal ownership of the seized assets to the US government, formally closing the case. |
Helix operated between 2014 and 2017 and processed at least 354,468 Bitcoin, worth roughly $300 million at the time. Prosecutors said a significant share of those transactions were tied to darknet drug markets. The service pooled and redistributed Bitcoin to obscure transaction trails, making it difficult to trace the origin and destination of funds. |
Larry Dean Harmon, the founder and operator of Helix, was arrested in February 2020 and pleaded guilty in August 2021 to conspiracy to commit money laundering. He acknowledged knowingly facilitating transactions linked to illicit marketplaces. In November 2024, Harmon was sentenced to three years in prison, followed by supervised release, along with a forfeiture judgment covering the seized assets. |
Investigators said Helix was infrastructure designed to support large-scale laundering rather than a neutral privacy tool. Harmon also operated Grams, a darknet search engine, and built application programming interfaces that allowed major darknet markets to integrate Helix directly into their Bitcoin withdrawal systems. |
The Tornado Cash parallel - The Helix case unfolds alongside ongoing legal action involving Tornado Cash. While US sanctions imposed on Tornado Cash in 2022 were overturned on appeal for exceeding regulatory authority, criminal cases against individual developers have continued even as protocol level restrictions were challenged. |
Why it matters - The Helix forfeiture shows how US authorities are targeting crypto infrastructure tied to illicit finance and underscores that enforcement actions in this area can take years to fully conclude. |
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More stories from the crypto ecosystem |
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Crypto scams uncovered |
AI-powered scams surged 500% in 2025: According to the TRM Labs 2026 Crypto Crime Report, the use of AI in crypto scams, including automated personas, deepfakes, and multilingual outreach, jumped about 500% in 2025, making fraudulent outreach more convincing and scalable. $37M global crypto scam leader convicted in the US: A Chinese national, Jingliang Su, was sentenced to 46 months in prison and ordered to pay nearly $26.9 million in restitution for laundering proceeds of a crypto investment scam that defrauded 174 Americans through fake online schemes. Thai & Korean police dismantled a $15M scam targeting 870 victims: Police in Thailand and Seoul jointly shut down a $15 million crypto scam that defrauded more than 870 South Koreans through a complex operation involving romance and fake lottery schemes and sophisticated laundering.
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Top 3 coins of the day |
Solana (SOL) |
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Key points: |
SOL slipped to $116, extending its decline as whale-led distribution and weakening network activity weighed on price. Trend strength remained elevated, with ADX above 30 and DMI favoring sellers, reinforcing the existing bearish structure.
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What you should know: |
SOL traded lower in the latest session after failing to hold its January rebound, continuing a broader sequence of lower highs and lower lows. The move coincided with renewed whale sell-offs, as large holders moved SOL to exchanges, adding to near-term supply pressure. |
At the same time, network activity cooled, with fewer new addresses and slowing on-chain engagement reducing organic demand. This combination of distribution and softer usage metrics kept downside risks elevated despite intermittent bounce attempts. |
From a trend perspective, ADX stayed above 30, confirming that the decline occurred within a strong directional move rather than consolidation. The DMI showed sellers maintaining control, while volume pointed to steady distribution instead of capitulation. |
Immediate support remains near $115, while prior lower highs around $130 now act as resistance. A shift in whale behavior or a pickup in network growth would be needed to alter the current bias. |
Canton (CC) |
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Key points: |
CC was trading around $0.172 at press time, holding near recent highs after briefly tagging $0.181, even as the broader market stayed under pressure. Price remained above the 9-day SMA, while the Stochastic RSI hovered in overbought territory, signaling strong momentum but rising exhaustion risk.
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What you should know: |
CC's recent move stood out for its resilience rather than speed. After pushing to a fresh local high near $0.181, the token cooled slightly but continued trading above its short-term 9-day SMA, suggesting buyers were still defending pullbacks. Volume expanded during the rally phase and tapered during consolidation, a pattern consistent with digestion rather than aggressive distribution. |
Momentum indicators reflected this balance. The Stochastic RSI stayed elevated above the 75 zone, pointing to sustained upside pressure, though the flattening slope hinted that upside momentum may be slowing. From a structure perspective, the $0.155–$0.160 region now acts as the key support zone to watch, while $0.180–$0.182 remains the immediate resistance band. |
Beyond the chart, CC continued to benefit from an institutional RWA narrative tied to Canton's role in permissioned, compliant tokenization efforts. Combined with relatively thin liquidity, even modest spot demand has been sufficient to keep price elevated, though follow-through volume remains critical for continuation. |
Ethereum (ETH) |
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Key points: |
ETH slid to $2,735, down 2.97% on the day, as broader risk-off sentiment pressured majors. Bearish momentum persisted, with the Awesome Oscillator remaining below zero despite slower downside acceleration.
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What you should know: |
Ethereum weakened after failing to hold above the $3,000 zone, extending its short-term decline amid a market-wide risk-off move. Macro pressure weighed on sentiment as traders reduced exposure across risk assets, spilling over into ETH and driving heavier sell-side volume during the breakdown. |
Price remained below the 20-day MA ($3,068) and the 50-day MA ($3,041), keeping the broader structure fragile even though the faster average still sits marginally above the slower one. The Awesome Oscillator stayed negative, signaling that bearish momentum remained dominant with red bars. |
Sentiment was further dented by recent ETH transfers linked to Vitalik Buterin, which sparked caution around potential supply overhang, even without confirmation of immediate selling intent. |
On the levels front, $2,700 is the immediate support, followed by $2,560. A recovery requires reclaiming $3,040–$3,070 to stabilize near-term structure. |
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