Crypto Market Slides as BTC, ETH Drop; Injective and AI DeFi Upgrades in Focus

I. Crypto Market Overview

Key Takeaways

Macro Environment

Germany's Bundesbank advocates euro-backed stablecoins to counter dollarization and support DeFi. The US trade deficit hit $901.5B in 2025, raising concerns over USD strength and Bitcoin's safe-haven appeal. US jobless claims fell to 206,000, signaling labor market resilience that may delay Fed rate cuts and pressure crypto prices.

Crypto Market

The crypto market saw broad declines over the past 12 hours, with BTC down 1.7% to $65,970 and ETH falling 2.1% to $1,926, pressured by ETF outflows and weak risk sentiment. Most altcoins dropped, led by ARB (-8.3%), FET (-5.9%), and MORPHO (-6.7%), while LEO (+2.4%), NIGHT (+2.3%), and STABLE (+3.9%) outperformed, driven by sector rotation and liquidity factors. SOL slid 3.0% to $80.21, and WLFI plunged 8.3% despite recent news, as risk-off flows dominated.

Today's Outlook

Key events today include the Injective Mainnet Upgrade, which aims to scale real-time EVM architecture, and the launch of deBridge's MCP AI integration, enabling AI-driven cross-chain swaps. Both are expected to impact DeFi infrastructure and interoperability.

Fear and Greed Index

44.00% Annual Percentile

12 Fear

Total Crypto Market Cap

$2.27T

2.10%

Total Market Trading Volume

$82.48B

2.01%

Altcoin Season Index

58.33%

Quarterly Percentile

33 / 100

Total Futures Market Open Interest

3.20B

0.81%

Futures

367.27B

2.60%

Perpetuals

II. Industry Updates

Macro-economic Policies

Joachim Nagel, President of the Bundesbank, advocated for a euro-backed stablecoin to provide low-cost cross-border payments and counter dollarization, which could enhance euro liquidity and support DEFI and stablecoin adoption in the crypto market.

The U.S. trade deficit reached $901.5 billion in 2025, one of the largest on record, signaling persistent imbalances that may impact USD strength and global capital flows, influencing Bitcoin's safe-haven demand and crypto market volatility.

U.S. weekly jobless claims dropped to 206,000, the lowest since January, indicating labor market resilience that could delay Federal Reserve rate cuts, potentially strengthening the dollar and pressuring crypto asset prices.

Gold prices fell below $5,000 after a 14% rally, as market consolidation followed hawkish signals from the Federal Reserve Chair nomination, reflecting shifting risk sentiment that may affect Bitcoin's narrative as digital gold.

European stock indices, including Germany's DAX, declined sharply, reflecting risk-off sentiment in traditional markets, which could drive increased capital flows into digital assets and boost DeFi liquidity as investors seek alternative returns.

Cryptocurrency Regulatory Trends

Soil launched the first RWA-compliant yield protocol on XRP Ledger, fully subscribing a $1M pool in 72 hours, signaling strong demand and expanding RLUSD's DeFi utility under regulatory compliance.

Polymarket has sued Massachusetts regulators, arguing that the CFTC holds sole authority over prediction markets, highlighting ongoing federal versus state jurisdiction disputes in crypto regulation.

South Korean prosecutors recovered 320.78 BTC by freezing exchange transactions linked to stolen funds, demonstrating effective enforcement and boosting confidence in crypto asset security frameworks.

Grayscale's Chief Legal Officer emphasized that clearer SEC guidance and upcoming legislation are crucial for unlocking long-term crypto market growth, potentially improving investor confidence and regulatory certainty.

SEC Chair Paul Atkins urged regulators to focus on transparency and long-term clarity rather than reacting to daily crypto price volatility, supporting a stable regulatory environment for digital assets.

LEO Token (LEO): LEO rose 2.4% in 24h, but no specific news or events were found to explain the gain; price action appears driven by market rotation or low liquidity.

Midnight (NIGHT): NIGHT gained 2.3% in 24h, with recent liquidity improvements noted, but no major news or protocol events identified as the driver for the move.

Tether Gold (XAUT): XAUT up 0.5% in 24h, with market cap reaching $2.58B and 24h volume $312M; recent news highlights tokenized gold dividends and growing institutional adoption.

Smart Money Movements

Morgan Stanley, ARK, BlackRock, Goldman Sachs, and Bank of America increased their Bitmine Immersion Technologies holdings by up to 1,668%, adding over $800 million in value despite a 48% share price drop.

BlackRock transferred 1,270 BTC ($84.92M) and 15,409 ETH ($30.22M) to Coinbase, signaling continued institutional engagement in digital assets.

A crypto whale opened a $67.12 million long position on Bitcoin with 20x leverage, depositing $8.58 million USDC on Lighter_xyz at an entry price of $67,096 per BTC.

BitMine acquired 35,000 ETH worth $69.37 million in a single day, including 15,000 ETH ($29.57M) from FalconX, highlighting aggressive accumulation strategies.

Bitcoin spot ETFs saw a net outflow of $133 million on February 18, with BlackRock's IBIT leading at $84.19 million, while Ethereum spot ETFs lost $41.83 million, led by ETHA's $29.93 million outflow.

Events to Watch

Feb 19 (Thu)

Injective Mainnet Upgrade scheduled; deBridge launches MCP AI integration, enabling cross-chain swaps via AI agents and developer tools.

Feb 20 (Fri)

US Q4 GDP preliminary data, PCE Price Index, and annualized GDP figures to be released; LayerZero token unlock for community and core contributors.

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