To The Moon

Daily Crypto Market Summary 5 Feb 2026

Bitcoin (BTC)

Bitcoin Plunges to 15-Month Low as ETF Outflows Top $2.9 Billion

Bitcoin has suffered a severe correction, dropping to a 15-month low below $72,000 ($71,986) with a daily decline of nearly 6%. The sell-off has wiped out approximately **$500 billion** in market cap since mid-January, driven by a relentless exodus of institutional capital. U.S. spot Bitcoin ETFs have seen $2.9 billion in outflows over the past 12 days, signaling a significant "risk-off" rotation by asset managers. The market structure appears bearish, with $800 million in liquidations (mostly longs) exacerbating the downside.

Despite the carnage, fundamental developments suggest long-term resilience. Cipher Mining's AI subsidiary attracted a staggering $13 billion in demand for its bond sale, highlighting the robust appetite for Bitcoin-adjacent infrastructure plays like AI data centers. Additionally, Fireblocks integrated with Stacks to bring Bitcoin DeFi to over 2,400 institutional clients, expanding the asset's utility beyond a store of value. However, U.S. Treasury Secretary Scott Bessent clarified that the government will not "bail out" Bitcoin, though he defended the strategic reserve concept as a diversification tool.

Key Market Drivers:

Institutional Capitulation: Record ETF outflows ($2.9B) indicate that traditional finance allocators are aggressively de-risking.

Macro Divergence: While Bitcoin dumps, Gold has surged, highlighting a decoupling where traditional safe havens are preferred over digital ones.

Mining Economics: Miners like Cipher pivoting to AI are finding massive capital support ($13B bond demand), stabilizing their balance sheets despite low BTC prices.

Strategic Reserves: The U.S. Treasury's stance (no bailouts but holding seized assets) keeps the "sovereign adoption" narrative alive but tempered.

Supply/Demand Fundamentals:

Liquidation Cascade: $520M-$800M in futures liquidations flushed out leverage, potentially resetting the market for a healthier base.

Miner Selling: Bhutan selling $22.4M in BTC adds to supply pressure, joining other miners forced to liquidate inventory.

Whale Activity: Cumberland DRW moving 200 BTC suggests OTC desks remain active, facilitating large-volume transfers.

On-Chain Bear Signal: Glassnode’s MVRV Z-Score hitting 2022 lows confirms the market is in deep value/bear territory.

Ethereum (ETH)

Ethereum Faces Headwinds as Founders Predict Asset Rotation

Ethereum is caught in the broader market downdraft, with sentiment dampened by the overall risk-off environment. However, veteran investors like Zhu Su (Three Arrows Capital founder) are predicting a cyclical asset rotation where ETH could eventually outperform BTC, drawing parallels to historical market cycles. This "beta catch-up" thesis relies on Ethereum maintaining its dominance in DeFi and stablecoin settlements, even as price action lags.

The ecosystem is seeing mixed signals. While price predictions for ETH remain cautious, the network's long-term utility is being reinforced by ongoing development. Fireblocks' integration with Stacks (for Bitcoin DeFi) indirectly validates the broader programmable blockchain thesis that Ethereum pioneered. However, with the Altcoin Season Index rising only slightly to 31, capital remains concentrated in Bitcoin or exiting the crypto ecosystem entirely, leaving ETH without a strong immediate catalyst.

Key Market Drivers:

Asset Rotation Thesis: Zhu Su's prediction of ETH eventually mimicking BTC's trajectory offers hope for a mean-reversion trade.

Market Correlation: ETH continues to trade in lockstep with tech stocks and BTC, suffering from the same macro liquidity withdrawal.

Institutional Focus: The lack of specific positive ETF news for ETH (unlike the BTC flows earlier in the year) leaves it vulnerable to sentiment shifts.

DeFi Stagnation: Wintermute's criticism of "stalled substance" in crypto applies to the lack of new killer apps driving ETH gas demand.

Supply/Demand Fundamentals:

Derivative Sentiment: Funding rates turning negative or neutral suggests a lack of aggressive long positioning.

Network Activity: Without a meme coin or NFT mania, ETH burn rates are likely lower, reducing the deflationary tailwind.

Whale Hesitation: Lack of major accumulation news suggests large players are waiting for a confirmed bottom before stepping in.

Solana (SOL)

Solana Ecosystem Navigates Volatility as Liquidations Hit Longs

Solana has not been spared from the market rout, with long positions heavily liquidated alongside Bitcoin and Ethereum. The network's high-beta nature means it suffers disproportionately during broad sell-offs. However, pockets of activity remain. Raydium continues to facilitate significant trading volume, particularly for stablecoins like USD1, showing that DeFi utility persists even in bear markets.

The "death of altseason" narrative, highlighted by Wintermute, points to a structural shift where capital is diluted across thousands of new tokens (many on Solana), preventing a unified rally. Despite this, Kyle Samani (formerly of Multicoin) reaffirmed his long-term conviction in Solana's tech stack after leaving his firm, citing its superior scalability compared to Ethereum's fragmentation. This developer/investor confidence provides a fundamental backstop to the current price weakness.

Key Market Drivers:

Leverage Flush: Significant liquidations in SOL futures indicate a cleansing of speculative excess.

DeFi Volume: Raydium's activity proves that users are still trading, generating fees for the network despite lower token prices.

Dilution Headwinds: The flood of new tokens (memes etc.) is fragmenting liquidity, making it harder for SOL itself to sustain rallies.

Tech Conviction: Key opinion leaders (Samani) sticking with the Solana thesis suggests the long-term vision remains intact.

Supply/Demand Fundamentals:

Stablecoin Velocity: USD1 volume on Raydium creates consistent demand for SOL as gas.

Speculative churn: High turnover in meme coins keeps network activity high, even if it doesn't translate to immediate price appreciation.

Institutional Flows: Lack of specific ETF news leaves SOL vulnerable to retail sentiment, which is currently fearful.

Alt-coins

Ondo Slides 3% While Privacy Coins and Stablecoins Show Divergence

The altcoin market is bleeding, with Ondo Finance (ONDO) sliding 3% to test key support at $0.256. The token is under selling pressure as the "RWA" narrative takes a backseat to macro liquidation fears. In contrast, privacy coins like Monero (XMR) are being watched for their non-correlated properties, though broader market beta is dragging them down. XRP is stalling under $1.65, with derivatives data painting a cautious picture as volatility fades.

Interestingly, stablecoins are seeing increased utility. Polymarket (often using USDC/Polygon) launched a real-world grocery store pop-up to compete with Kalshi, highlighting the growing "consumer crypto" interface. Husky Inu AI (HINU) defied the downtrend, completing a price move to $0.00026230, proving that niche "AI x Meme" narratives can still attract capital. Meanwhile, Vaulta crashed 20% to new lows, underscoring the brutal "survival of the fittest" phase for smaller caps.

Key Market Drivers:

RWA Weakness: ONDO's slide suggests that even strong narratives (tokenization) are not immune to liquidity crunches.

Privacy Utility: XMR remains a hedge, but market-wide selling is suppressing its breakout potential.

Prediction Markets: Real-world marketing by Polymarket/Kalshi shows the sector is aggressively expanding its user base.

Meme/AI Resilience: HINU's rise amidst a crash highlights that speculative capital is rotating into micro-caps rather than exiting completely.

Supply/Demand Fundamentals:

Support Tests: Critical support levels (ONDO at $0.256, XRP at $1.50) are being tested; failure here could trigger further capitulation.

Token Unlocks/Dilution: Projects like Vaulta hitting ATLs suggests inflation is outpacing demand.

Niche Demand: Specific sectors (AI memes, Prediction markets) are finding bids independent of BTC price action.

Market Trends & Others

Galaxy Digital Posts $482M Loss as "Crypto Winter" Vibes Return

The macro backdrop for crypto has turned decidedly grim. Galaxy Digital reported a $482 million net loss in Q4, attributing it to weakening digital asset prices and volatility. This signals that even top-tier crypto firms are bleeding. Wintermute's founder offered a blunt assessment, criticizing the industry for stalling on substance and relying too heavily on speculation and stablecoins. On the regulatory front, U.S. officials hinted that crypto legislation could be signed by April, providing a glimmer of hope for clarity.

Globally, the U.S. dollar's share of reserves has fallen to 40%, a long-term trend that usually favors crypto, but currently, gold is the primary beneficiary, surging on central bank purchases. Binance continues to dominate, holding a massive $155 billion lead in reserves over competitors, reinforcing the "flight to quality" within exchanges. Meanwhile, Steak 'n Shake investing in Bitcoin for its treasury proves that corporate adoption is proceeding, albeit slowly, regardless of short-term price action.

Key Market Drivers:

Corporate Pain: Galaxy's massive loss sets a bearish tone for earnings season, confirming the sector's financial stress.

Regulatory Timeline: Potential legislation by April keeps the "policy put" option alive for later in 2026.

Macro Rotation: De-dollarization is benefitting Gold over Bitcoin right now, creating a temporary divergence.

Exchange Dominance: Binance's fortress balance sheet ($155B lead) attracts users seeking safety during turbulent times.

Supply/Demand Fundamentals:

Reserve centralization: Users flocking to Binance centralizes liquidity, potentially reducing fragmentation but increasing single-point risk.

Gold Competition: Record Gold ETF inflows are cannibalizing potential Bitcoin inflows, acting as a substitute store of value.

Adoption Inertia: Corporate treasury moves (Steak 'n Shake) create sticky, long-term demand that doesn't panic sell.