Crypto Market Plunges: BTC and ETH Lead Sharp Selloff Amid Macro Volatility

I. Crypto Market Overview

Key Takeaways

Macro Environment

US PPI and CPI data releases are in focus, with persistent inflation driving hawkish rate expectations and a stronger dollar. The ECB's recent rate cut has increased volatility and pressured euro-pegged assets. Regulatory tightening continues globally, with the US Treasury sanctioning Iran-linked exchanges and Hong Kong issuing stablecoin licenses.

Crypto Market

The crypto market saw sharp declines over the past 12 hours, with BTC down 6.66% to $78,489 and ETH falling 10.07% to $2,436. Most major altcoins dropped, led by SOL (-11.29%), ARB (-10.28%), and FET (-9.82%), as risk-off sentiment and ETF outflows weighed on prices. HYPE bucked the trend, rising 1.93% on strong DEX activity, while MOLT plunged 37.83% after a prior meme-driven rally.

Today's Outlook

Today's key events include a SUI token unlock of 43.53M tokens and an Ethena unlock of 40.63M tokens, both potentially impacting supply and volatility. Major network upgrades and governance votes are scheduled, alongside a stVaults Builders Fireside Chat on novel Ethereum staking products.

Fear and Greed Index

10.00% Annual Percentile

26 Fear

Total Crypto Market Cap

$2.67T

5.88%

Total Market Trading Volume

$183.66B

9.27%

Altcoin Season Index

0.00%

Quarterly Percentile

26 / 100

Total Futures Market Open Interest

3.36B

1.76%

Futures

592.93B

4.61%

Perpetuals

II. Industry Updates

Macro-economic Policies

US December Producer Price Index (PPI) rose 0.5% month-on-month and 3.0% year-on-year, exceeding expectations and signaling persistent services inflation. This has led to a hawkish repricing in rates and a stronger US dollar, increasing downside pressure on Bitcoin and DeFi liquidity.

The European Central Bank cut its benchmark interest rates by 0.25 percentage points, effective February 5, 2026. The move pressured the euro and supported the US dollar, contributing to increased volatility in crypto markets and impacting BTC price correlations with fiat currencies.

India will release a new Consumer Price Index (CPI) series on February 12, 2026, with a modernized basket reflecting digital services and reduced food weighting. This update is expected to stabilize inflation readings, potentially reducing volatility in INR-denominated crypto trading and DeFi flows.

Germany's Hesse region reported a flat CPI for January, indicating stable consumer prices. This data point suggests muted inflationary pressure in the eurozone, which may limit near-term EUR volatility and its impact on euro-pegged stablecoins and cross-border crypto settlements.

Recent US macro data and central bank policy signals have driven a sharp rotation from crypto ETFs into precious metals, with nearly $2 billion withdrawn from BTC and ETH funds in five days. This shift has amplified crypto market volatility and reduced short-term DeFi liquidity.

Cryptocurrency Regulatory Trends

The US Treasury has sanctioned Iran-linked crypto exchanges, marking its first enforcement action in the sector. This move increases compliance risks for global exchanges and signals stricter anti-money laundering oversight.

Hong Kong has begun issuing stablecoin licenses under a new regulatory framework, requiring issuers to maintain strong reserves and governance. This enhances user protection and could boost institutional confidence in the region.

Ghana's central bank launched a national crypto literacy initiative after passing the VASP Act, aiming to educate users and enforce licensing. This is expected to reduce fraud and support the country's growing digital asset market.

The European Union's MiCA regulation has established a unified crypto oversight framework, reducing regulatory fragmentation and providing a consistent baseline for cross-border operations, which may attract more institutional investors.

Canton (CC): Trading volume surged 33% to $57.1M in 24h, driven by institutional partnerships with DTCC, Nasdaq, BNY, and Goldman Sachs, and strong Layer 1 privacy narrative.

Hyperliquid (HYPE): 24h volume reached $761.8M with a 2.4% price gain, fueled by record liquidations and a 38% weekly price increase as on-chain perp DEX activity accelerates.

Moltbook (MOLT): 24h price jumped 42.7% and volume hit $97.8M, following a viral AI agent milestone and a Binance CEO tweet, sparking rapid meme coin trading on Base chain.

Smart Money Movements

BitMine increased its Ethereum holdings by 40,302 ETH, bringing its total to 4.24 million ETH, now valued at $9.6 billion, but faces over $6 billion in unrealized losses.

A whale known as '0xFB7' purchased an additional 10,000 ETH from WinterMute for $26.36 million, raising its total Ethereum holdings to 120,169 ETH, valued at $294.79 million in staking.

A major whale's $230 million ETH long position was liquidated at $2,200, resulting in a total loss of $230 million USDC; the whale still holds $4.8 billion in assets, including 901,000 ETH and 33,000 BTC.

A newly created wallet '0x9D2' sold its entire $HYPE token position for $41.27 million, incurring a $3.72 million loss after holding for just three days.

World Liberty Fi invested $150,000 to acquire 1.13 million EGLD, 9.76 million MEMES, and 7.75 million 'Yi' tokens, as tracked by OnchainLens.

Events to Watch

Feb 2 (Mon)

NFT Paris 2026 opens in France, focusing on NFT innovation; Digital Assets Forum (DAF3) convenes in London, spotlighting digital asset trends; White House Crypto Summit addresses U.S. crypto policy.

Feb 2 (Mon)

Bank of Japan releases its Summary of Opinions, providing insights into Japan’s economic outlook and monetary policy; ISM Manufacturing PMI for January is published, indicating U.S. manufacturing sector health.

Feb 3 (Tue)

Reserve Bank of Australia announces its interest rate decision, with markets expecting a 25bp hike after recent inflation data; outcome may impact AUD and global risk sentiment.

Feb 4 (Wed)

ADP releases U.S. private sector employment change data for January, offering an early signal on labor market strength ahead of official jobs report.

Feb 5 (Thu)

European Central Bank and Bank of England hold monetary policy meetings; ECB announces main refinancing rate, both events closely watched for rate guidance.

Table of Contents

I. Crypto Market Overview

Key Takeaways

Macro Environment

Crypto Market

Today's Outlook

II. Industry Updates

Macro-economic Policies

US December Producer Price Index (PPI) rose 0.5% month-on-month and 3.0% year-on-year, exceeding expectations and signaling persistent services inflation. This has led to a hawkish repricing in rates and a stronger US dollar, increasing downside pressure on Bitcoin and DeFi liquidity.

The European Central Bank cut its benchmark interest rates by 0.25 percentage points, effective February 5, 2026. The move pressured the euro and supported the US dollar, contributing to increased volatility in crypto markets and impacting BTC price correlations with fiat currencies.

Germany's Hesse region reported a flat CPI for January, indicating stable consumer prices. This data point suggests muted inflationary pressure in the eurozone, which may limit near-term EUR volatility and its impact on euro-pegged stablecoins and cross-border crypto settlements.

Recent US macro data and central bank policy signals have driven a sharp rotation from crypto ETFs into precious metals, with nearly $2 billion withdrawn from BTC and ETH funds in five days. This shift has amplified crypto market volatility and reduced short-term DeFi liquidity.

Cryptocurrency Regulatory Trends

The US Treasury has sanctioned Iran-linked crypto exchanges, marking its first enforcement action in the sector. This move increases compliance risks for global exchanges and signals stricter anti-money laundering oversight.

Hong Kong has begun issuing stablecoin licenses under a new regulatory framework, requiring issuers to maintain strong reserves and governance. This enhances user protection and could boost institutional confidence in the region.

Ghana's central bank launched a national crypto literacy initiative after passing the VASP Act, aiming to educate users and enforce licensing. This is expected to reduce fraud and support the country's growing digital asset market.

The European Union's MiCA regulation has established a unified crypto oversight framework, reducing regulatory fragmentation and providing a consistent baseline for cross-border operations, which may attract more institutional investors.

Trending Tokens

Canton (CC): Trading volume surged 33% to $57.1M in 24h, driven by institutional partnerships with DTCC, Nasdaq, BNY, and Goldman Sachs, and strong Layer 1 privacy narrative.

Hyperliquid (HYPE): 24h volume reached $761.8M with a 2.4% price gain, fueled by record liquidations and a 38% weekly price increase as on-chain perp DEX activity accelerates.

Moltbook (MOLT): 24h price jumped 42.7% and volume hit $97.8M, following a viral AI agent milestone and a Binance CEO tweet, sparking rapid meme coin trading on Base chain.

Smart Money Movements

BitMine increased its Ethereum holdings by 40,302 ETH, bringing its total to 4.24 million ETH, now valued at $9.6 billion, but faces over $6 billion in unrealized losses.

A whale known as '0xFB7' purchased an additional 10,000 ETH from WinterMute for $26.36 million, raising its total Ethereum holdings to 120,169 ETH, valued at $294.79 million in staking.

A major whale's $230 million ETH long position was liquidated at $2,200, resulting in a total loss of $230 million USDC; the whale still holds $4.8 billion in assets, including 901,000 ETH and 33,000 BTC.

A newly created wallet '0x9D2' sold its entire $HYPE token position for $41.27 million, incurring a $3.72 million loss after holding for just three days.

World Liberty Fi invested $150,000 to acquire 1.13 million EGLD, 9.76 million MEMES, and 7.75 million 'Yi' tokens, as tracked by OnchainLens.

Events to Watch

Feb 2 (Mon)

Feb 2 (Mon)

Feb 3 (Tue)

Feb 4 (Wed)

Feb 5 (Thu)

III. Phemex Market Focus

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