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Trump vs banks: How stalled crypto legislation is crushing market sentiment

Trump vs banks: How stalled crypto legislation is crushing market sentiment

The cryptocurrency market declined 0.58 per cent over the past 24 hours, settling at a total market capitalisation of US$2.33T. This movement reflects more than routine volatility. It signals a market grappling with regulatory headwinds and a pronounced alignment with traditional risk assets. The 88 per cent correlation with the S&P 500 underscores that crypto no longer trades in isolation. Macro forces now dictate short-term direction, and investors must parse political developments with the same rigour they apply to on-chain metrics.

I view this convergence not as a weakness but as a maturation phase. Digital assets now respond to the same liquidity currents and geopolitical shocks that move equities, while retaining unique optionality that traditional markets cannot replicate.

At the core of the selloff lies stalled United States crypto legislation. On March 3, President Trump publicly pressured banks, stating that the GENIUS Act faces obstruction from financial institutions and urging a compromise to advance the Clarity Act. This deadlock creates a persistent regulatory overhang. Market participants price in the risk that comprehensive market-structure reform may falter, leaving projects in a grey zone where compliance costs rise, and innovation slows.

The absence of a clear legislative path discourages institutional allocation and fuels cautious positioning among retail traders. I have long argued that regulatory clarity accelerates adoption, but only when frameworks respect decentralisation. Legislation that concentrates control or imposes legacy compliance burdens on novel architectures will stifle the very innovation it claims to foster.

Sentiment indicators confirm the psychological pressure. The CMC Fear and Greed Index sits at 19, marking extreme fear and its lowest reading in weeks. Social media amplified this anxiety, particularly after Cardano founder Charles Hoskinson characterised the proposed Clarity Act as deeply flawed legislation that could empower regulators to stifle new projects. This narrative resonated across altcoin communities. ADA declined 4.6 per cent, outpacing the broader market as investors rotated toward perceived safety.

When influential voices question regulatory frameworks, the market reacts swiftly, especially in an environment already primed for risk aversion. I value independent analysis over crowd sentiment. Extreme fear often coincides with attractive entry points for long-term builders, but only for those who distinguish between temporary political noise and enduring technological progress.

From a technical standpoint, the US$2.25T market cap level represents critical support, corresponding to the 78.6 per cent Fibonacci retracement from the recent swing high. Holding this zone keeps the door open for a relief rally should legislative progress emerge. A decisive break below, however, opens a path toward the yearly low near US$2.17T. The tight correlation with equities means crypto traders must monitor the S&P 500 relationship with its 100-day moving average.

When that index closes below key technical levels, as it did recently at 6,816.63, digital assets often follow with amplified volatility due to lower liquidity in overnight sessions. I track these levels not as prophecy but as probabilistic guides. Technical structure matters most when it aligns with fundamental catalysts, and right now, the fundamental catalyst is legislative momentum.

Broader financial markets faced significant downward pressure on March 4, driven by escalating geopolitical conflict in the Middle East. Investors retreated from risk assets amid concerns about potential disruption to global oil supplies and a corresponding spike in inflation. The S&P 500 fell 0.94 per cent to 6,816.63, while the Nasdaq Composite dropped 1.02 per cent to 22,516.69.

European indices suffered steeper losses, with the DAX declining 3.44 per cent and the CAC 40 falling 3.46 per cent. Asian markets extended the selloff, with the Nikkei 225 slumping 3.43 per cent to 54,345.93. Tehran’s threat to close the Strait of Hormuz, a critical artery for roughly 20 per cent of global oil consumption, pushed crude prices higher and forced investors to push back expectations of a Federal Reserve rate cut to September 2026.

In this environment, crypto behaves as a high beta risk asset, not a safe haven. Gold traded above US$5,100, and the US Dollar advanced for a third consecutive day, confirming the flight to quality. I see this dynamic as temporary. Over longer horizons, decentralised networks offer properties that fiat systems cannot match, but short-term price action will continue to mirror macro risk sentiment.

The near-term trajectory hinges on two factors: regulatory developments and technical support. Positive movement on the Clarity Act, such as a Senate Banking Committee markup date or bipartisan compromise language on stablecoin yields, could trigger a relief rally. Conversely, failure to hold the US$2.25T support level risks extending the decline. Traders should monitor ETF flow data for clues on institutional positioning, as these products now serve as a primary conduit for traditional capital entering crypto markets.

A sustained rise in the Fear and Greed Index above 25 would signal a shift from extreme fear, but such a move likely requires concrete legislative progress or a de-escalation in geopolitical tensions. I watch ETF flows closely because they reveal whether institutions are accumulating on weakness or distributing into strength. Right now, the data suggests caution, but caution can reverse quickly with the right catalyst.

This moment tests the resilience of decentralised systems. Regulatory uncertainty will persist as long as policy frameworks treat crypto as an extension of traditional finance rather than a distinct technological paradigm. Independent analysis reveals that markets often overreact to political noise, creating opportunities for those who distinguish between temporary headwinds and structural change.

The convergence of macro pressure, technical levels, and legislative ambiguity demands a disciplined approach. Investors who focus on long-term adoption metrics, on-chain activity, and the steady progression of infrastructure development will navigate this volatility with greater clarity.

I remain convinced that the fusion of artificial intelligence and decentralised networks will unlock new models of value creation that legacy systems cannot replicate. The path forward requires patience, critical thinking, and a commitment to the principles of decentralisation that define the sector’s enduring value. Those who maintain conviction during periods of fear often shape the next cycle of innovation. 

 

Source: https://e27.co/trump-vs-banks-how-stalled-crypto-legislation-is-crushing-market-sentiment-20260304/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Crypto market bleeds US$44B as US$78M Bitcoin liquidations spark panic

Crypto market bleeds US$44B as US$78M Bitcoin liquidations spark panic

Global financial markets navigated a holiday-shortened week with United States exchanges shuttering their doors on Monday, February 16, 2026, for Presidents’ Day. The New York Stock Exchange and Nasdaq stood silent while traders worldwide turned their attention to international venues where activity unfolded against the backdrop of Lunar New Year celebrations that closed mainland Chinese markets for an entire week. This confluence of calendar events created an unusual trading environment in which sentiment flowed primarily through Asian and European channels, without the usual gravitational pull of American price discovery.

Asian markets absorbed the previous Friday’s benign United States inflation report with measured optimism. The consumer price index had climbed just 0.2 per cent in January, a figure that reinforced expectations for Federal Reserve rate cuts later in the year. Japanese equities edged higher as participants digested fourth-quarter 2025 gross domestic product data showing the economy had reversed a deep contraction from the prior period and eked out modest growth.

Australian shares followed suit, with the ASX 200 gaining ground as banking-sector earnings reports delivered unexpected strength. These gains proved fragile when juxtaposed against cryptocurrency markets, which operated independently of traditional asset correlations and plunged 1.85 per cent to a total valuation of US$2.35 trillion over a 24-hour period.

The digital asset selloff originated from an alleged coordinated Bitcoin dump by major exchanges totalling more than US$4.5 billion, according to social media chatter that spread rapidly on February 15. Whether substantiated or not, the narrative ignited a cascade of forced liquidations that erased US$78.23 million in Bitcoin long positions within a single day.

Market psychology shifted abruptly as fear replaced complacency and traders scrambled to reduce leverage across the board. This deleveraging event exposed the fragility inherent in the highly leveraged crypto markets, where perception often moves prices more decisively than fundamentals. Bitcoin itself remained relatively stable around US$68,800 after weekend volatility, but the broader ecosystem suffered disproportionately as capital fled riskier assets.

Ethereum emerged as a critical pressure point in the downturn, falling 5.86 per cent and underperforming the wider market by more than 2x. On-chain analytics revealed a whale transferring 261,020 ETH worth approximately US$820 million to Binance, an action traders interpreted as imminent selling pressure. This technical breakdown below the US$2,000 psychological threshold triggered a domino effect across altcoins, with meme coins bearing the brunt of the punishment.

SHIB, DOGE, and PEPE all dropped six per cent to eight per cent as risk aversion intensified. Ethereum’s role as the bellwether for alternative cryptocurrencies meant its weakness transmitted rapidly throughout the ecosystem, amplifying losses beyond what Bitcoin’s price action alone would suggest.

Currency and commodity markets reflected a more subdued global mood. The United States Dollar Index held steady at 96.82 while the Japanese yen weakened slightly by 0.2 per cent to approximately 152.80 per dollar. Energy markets remained under pressure with Brent crude trading below US$68 a barrel and West Texas Intermediate hovering near US$63.

Gold continued its remarkable ascent, trading near US$5,014 per ounce, a level that speaks to persistent demand for non-yielding safe havens despite improving inflation data. These traditional markets operated with relative calm compared to the turbulence in digital assets, highlighting a growing divergence between crypto and conventional financial instruments during periods of stress.

European markets in the United Kingdom and the Eurozone maintained normal operations with participants awaiting key economic releases later in the week, including industrial production and consumer confidence figures. Without American trading desks active, European volumes remained thin, and directional moves were limited.

This vacuum allowed cryptocurrency markets to dominate financial headlines despite their comparatively small size relative to global equity and bond markets. The episode underscored how digital assets now command disproportionate media attention and retail trader focus even during periods when traditional markets observe holidays.

From my perspective, this selloff represents a necessary correction after months of speculative excess rather than a fundamental breakdown in the crypto thesis. The market had become dangerously overleveraged with traders assuming perpetual upward momentum.

The alleged exchange, whether factual or exaggerated, served as the catalyst that exposed this fragility. What matters now is whether organic buying emerges to absorb the liquidation cascade. Retail participation reportedly increased over the weekend, according to on-chain metrics, but whether this demand proves durable remains uncertain.

The critical technical level to watch sits at US$2.17 trillion, the yearly low that, if breached, could trigger another leg down toward deeper support zones. A sustained hold above the 24-hour pivot point of US$2.36 trillion would suggest buyers have regained control, and consolidation may follow.

The disconnect between stable traditional markets and volatile crypto markets during this holiday period reveals an important evolution. Digital assets increasingly trade on their own internal dynamics rather than macroeconomic cues that drive stocks and bonds.

United States inflation data that buoyed Asian equities did little to support cryptocurrencies, which instead reacted to exchange flows, whale movements, and social media narratives. This decoupling suggests crypto has matured into its own distinct asset class with unique drivers, though it also highlights persistent immaturity in risk management practices among participants.

Looking ahead, the resumption of United States trading on Tuesday, February 17, will provide crucial context. American institutional players re-entering the market could either stabilise crypto prices through dip buying or accelerate declines if they follow the lead of leveraged speculators exiting positions.

The Federal Reserve’s policy trajectory remains generally supportive of risk assets, but crypto markets must first resolve their internal imbalances before external factors regain influence. Until exchange inflows subside and Ethereum reclaims US$2,000, the path of least resistance points downward.

This episode ultimately reinforces a timeless market truth. Leverage amplifies both gains and losses. The 1.85 per cent decline in total crypto market capitalisation masks far more violent price action beneath the surface, where highly leveraged positions faced liquidation at accelerating speeds.

For long-term believers, such corrections serve a cleansing function, removing weak hands and excessive speculation. For short-term traders, they represent existential threats.

The market now stands at an inflection point where sentiment hangs in delicate balance between capitulation and recovery. How it resolves will depend less on macroeconomic data and more on whether spot demand can absorb the remaining sell-side pressure before fear metastasises further.

 

Source: https://e27.co/crypto-market-bleeds-us44b-as-us78m-bitcoin-liquidations-spark-panic-20260216/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Crypto market cap drops to US$2.3T as Fed rate cut hopes fade after hot jobs report

Crypto market cap drops to US$2.3T as Fed rate cut hopes fade after hot jobs report

Cryptocurrency assets bore the brunt of a liquidity reassessment triggered by robust American employment data. While Japan’s Nikkei 225 surged past the historic 58,000 threshold amid domestic political momentum and the broader Asia Pacific index touched a record high, digital asset markets retreated two per cent to a US$2.3 trillion valuation.

This divergence underscores a fundamental reality I have observed throughout market cycles. When the Federal Reserve’s policy trajectory shifts, risk assets with the highest duration sensitivity are affected first and most severely. Cryptocurrencies continue to trade as premium risk instruments tethered to global liquidity conditions despite persistent narratives of independence.

The catalyst came from January’s US nonfarm payrolls report, which reported 130,000 new jobs, nearly double economists’ median forecast. This figure alone recalibrated market pricing for Federal Reserve action, pushing anticipated rate cuts from June into July 2026. Traditional equity markets reacted with restraint, with the S&P 500 and Nasdaq Composite closing nearly flat. Crypto markets exhibited a 68 per cent correlation with the Nasdaq 100 index and absorbed the shock with characteristic volatility. This statistical linkage confirms what seasoned observers recognise.

Digital assets function less as an inflation hedge and more as a leveraged bet on expansive monetary policy. When the prospect of cheaper capital recedes, speculative positioning unwinds rapidly. The two per cent decline in market cap represents not a fundamental rejection of blockchain technology but a mechanical repricing of future cash flows under tighter financial conditions.

Compounding this macro-driven pressure, derivatives markets amplified the downturn through forced liquidations. Bitcoin alone saw US$188 million in long-position liquidations in 24 hours, a 130 per cent surge that transformed a measured pullback into a sharp correction. These cascading liquidations reveal the fragility embedded in leveraged crypto trading ecosystems.

When price momentum reverses, algorithmic liquidation engines accelerate selling pressure beyond organic market depth, creating self-reinforcing downward spirals. This dynamic operates independently of underlying project fundamentals, punishing even robust protocols alongside speculative ventures. The phenomenon reflects a structural vulnerability in digital asset markets that persists despite a decade of maturation. Excessive leverage remains the accelerant that turns policy shifts into panic.

Sentiment metrics further illustrate the psychological dimension of this retreat. The market-wide fear and greed index plunged to eight, registering extreme fear across participant cohorts. Such readings typically emerge during capitulation phases when retail investors abandon positions after sustained losses. Historically, these moments often coincide with short-term bottoms and also signal prolonged recovery periods ahead. Extreme fear does not reverse instantaneously. It requires sustained positive catalysts to rebuild confidence.

Currently, no such catalyst exists on the immediate horizon. Investors face a rising probability of a US government shutdown to 84 per cent ahead of the February 14 deadline, introducing fiscal uncertainty that compounds concerns about monetary tightening. This dual pressure on both fiscal and monetary fronts creates an unusually constrained environment for risk assets.

Technical structure now determines the near-term trajectory. The US$2.17 trillion market capitalisation represents this year’s low and serves as critical psychological and algorithmic support. A decisive break below this threshold could trigger additional liquidations targeting the 78.6 per cent Fibonacci retracement near US$2.4 trillion.

Current positioning suggests markets may stabilise above the yearly low if macro conditions do not deteriorate further. Any sustained recovery requires reclaiming momentum toward the 38.2 per cent Fibonacci resistance at US$2.86 trillion. This level demands either a dovish pivot from central banks or significant organic capital inflows. Neither scenario appears imminent, given the Fed’s data-dependent stance and persistent institutional caution toward digital assets.

I view this correction as a necessary recalibration rather than a structural breakdown. Crypto markets have expanded dramatically since the previous cycle, attracting capital that entered during periods of abundant liquidity. As monetary conditions normalise, weaker hands exit, concentrating ownership among long-term holders with higher conviction.

This consolidation phase, though painful in the short term, often precedes more sustainable growth trajectories. The current market cap of US$2.3 trillion still reflects substantial institutional adoption compared to prior cycles, suggesting foundational demand remains intact despite tactical withdrawals.

Tomorrow’s US Consumer Price Index report looms as the next pivotal data point. Should inflation show unexpected moderation, markets might reprice rate cut expectations forward, providing temporary relief. I remain sceptical that one data release will override the Fed’s commitment to ensuring inflation remains anchored.

The central bank has consistently prioritised credibility over market comfort, and recent communications suggest officials welcome some financial tightening to reinforce their anti-inflation resolve. Crypto markets must therefore navigate an extended period of constrained liquidity rather than anticipating imminent policy relief.

The path forward demands discernment between cyclical pressure and secular decline. Digital assets face genuine headwinds from tighter monetary policy, but their underlying utility continues expanding across payments, identity, and programmable finance. The current two per cent drawdown represents a liquidity-driven adjustment within a maturing asset class, not a verdict on blockchain’s long-term viability. Investors who recognise this distinction will view periods of extreme fear not as exit signals but as opportunities to accumulate quality assets at discounted valuations.

Markets ultimately reward patience during liquidity droughts, though the duration of such periods remains unpredictable. For now, preservation of capital and selective positioning offer wiser strategies than either panic selling or aggressive leverage. The US$2.3 trillion market cap reflects a market in transition, shedding speculative excess while retaining its core value proposition for those willing to endure the volatility inherent in technological transformation.

 

Source: https://e27.co/crypto-market-cap-drops-to-us2-3t-as-fed-rate-cut-hopes-fade-after-hot-jobs-report-20260212/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j