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Markets in freefall: AI fears trigger US$4B Bitcoin ETF exodus

Markets in freefall: AI fears trigger US$4B Bitcoin ETF exodus

From Wall Street to Asian bourses, from oil futures to digital currencies, the message is clear: risk appetite has evaporated, and a defensive crouch has become the default stance. This is not merely a localised correction or sector-specific adjustment. This is a full-scale recalibration of market sentiment, driven by artificial intelligence anxieties, robust economic data that complicates the rate-cut narrative, and a commodity complex under siege from supply gluts.

In my view, what we are witnessing represents a significant stress test for the interconnected global financial system, and the results so far paint a sobering picture.

The epicentre of this week’s turmoil lies squarely on Wall Street, where fresh concerns about the long-term implications of artificial intelligence on commercial real estate and software sectors triggered a violent selloff on Thursday. The Nasdaq Composite plummeted 2.03 per cent, erasing weeks of gains in a single trading session. The S&P 500 fared only marginally better, dropping 1.57 per cent as investors scrambled to reduce exposure to growth-oriented names.

These are not trivial declines. They reflect a fundamental reassessment of valuations in sectors that have carried the market to record highs over the past year. The AI revolution, once celebrated as a catalyst for unprecedented productivity gains, has now become a source of anxiety as market participants question whether the technology will disrupt more businesses than it creates.

This flight from risk assets has produced a predictable but nonetheless significant rotation into safe havens. United States Treasuries rallied sharply, pushing the 10-year yield down to approximately 4.09 per cent, its lowest level since early December. This move tells us something important about investor psychology right now.

When capital flows aggressively into government bonds amid strong economic data, it signals that fear has overtaken greed as the dominant market emotion. The traditional playbook would suggest that robust employment figures and resilient consumer spending should push yields higher. Instead, the opposite has occurred, revealing the depth of concern about potential dislocations in equity markets.

The commodity complex has not escaped the carnage. Oil prices fell more than 2 per cent after a devastating report from the International Energy Agency projected a record global crude surplus of 3.7 million barrels per day in 2026. This figure represents a supply glut of historic proportions, one that threatens to keep energy prices depressed for the foreseeable future.

For oil-producing nations and energy companies, this outlook presents serious challenges to fiscal planning and capital expenditure decisions. For consumers and central bankers, lower energy costs could provide some relief on the inflation front, though the broader economic implications of a weakening commodity complex remain concerning.

Gold, traditionally the ultimate safe haven during periods of market stress, has also stumbled. The precious metal tumbled below the US$5,000 per ounce mark as strong jobs data dampened hopes for immediate interest rate cuts from the Federal Reserve. This development highlights a fascinating tension in current market dynamics.

Investors want protection from equity volatility, but they also recognise that a strong labour market gives the Fed little incentive to ease monetary policy. Higher-for-longer interest rates diminish the appeal of non-yielding assets like gold, creating downward pressure even during periods of elevated uncertainty.

Perhaps the most instructive lesson from this week’s market action comes from the cryptocurrency sector, which has declined 1.55 per cent over the past 24 hours, bringing its total market capitalisation to US$2.28 trillion. What makes this move particularly significant is not its magnitude but its correlation structure.

The crypto market now exhibits a 93 per cent correlation with the S&P 500 and an 89 per cent correlation with gold over the same period. These figures demolish any remaining arguments that digital assets function as uncorrelated portfolio diversifiers during stress events. When correlations approach unity across asset classes, it tells us that macro forces, specifically interest rate expectations and dollar dynamics, are driving all boats in the same direction.

The institutional dimension of the crypto selloff deserves careful attention. Bitcoin exchange-traded fund assets under management fell to US$97.31 billion the previous day, indicating sustained selling pressure from professional investors. This was compounded by US$80.21 million representing long positions that were forcibly closed.

The combination of spot selling and leveraged position unwinding created a negative feedback loop that amplified the downward move. In my assessment, this dynamic represents one of the most vulnerable aspects of the current crypto market structure, where institutional flows and derivative markets can interact in ways that accelerate price moves beyond what fundamentals would justify.

Looking ahead, the technical picture for Bitcoin centres on the US$66,000 support zone. A decisive break below this level could open the door to a swift decline toward US$50,000, a scenario that Standard Chartered has publicly identified as possible.

The key near-term catalyst will be the FOMC meeting minutes scheduled for release on February 19, which could provide crucial guidance on the Federal Reserve’s interest rate trajectory. Until then, markets will likely remain in a holding pattern, with participants reluctant to commit capital until they have greater clarity on the direction of monetary policy.

My view on the current situation is that we are experiencing a necessary and ultimately healthy correction in asset prices that had become stretched by optimism about technological transformation and monetary easing. The AI narrative, while powerful, had pushed valuations in certain sectors to levels that assumed perfection in execution and adoption.

Reality rarely cooperates with such assumptions. Similarly, the expectation that central banks would rush to cut rates despite solid economic data always seemed premature. Markets are now adjusting to a more realistic assessment of both opportunities and risks.

The path forward will depend heavily on whether institutional investors interpret current price levels as buying opportunities or as warnings to further reduce exposure. Daily ETF flow data will provide the most immediate signal of sentiment. A return to consistent net inflows would suggest that professional capital views the selloff as a dip worth buying. Continued outflows would indicate that de-risking has further to run.

For now, the burden of proof rests with the bulls, who must demonstrate that support levels will hold up against persistent macroeconomic headwinds and technical pressure. The markets have spoken clearly this week, and their message is one of caution, recalibration, and respect for the powerful forces that shape global capital flows.

 

Source: https://e27.co/markets-in-freefall-ai-fears-trigger-us4b-bitcoin-etf-exodus-20260213/

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

Crypto market cap hits US$2.4T again: Why institutional whales are buying the dip

Crypto market cap hits US$2.4T again: Why institutional whales are buying the dip

Major US stock indices climbed on Tuesday, February 10, 2026, thanks to a strong rebound in technology shares that calmed worries about recent spending on artificial intelligence. Investors watched the S&P 500 rise 0.5 per cent to close at 6,964.82, inching nearer to the all-time high from two weeks earlier. The Nasdaq Composite, heavy with tech stocks, jumped 0.9 per cent to 23,238.67, while the Dow Jones Industrial Average barely moved, adding less than 0.1 per cent to end at 50,135.87.

This uptick came after a tough stretch last week, where tech stocks faced heavy selling. Chipmakers drove much of the recovery, with Nvidia gaining 2.4 per cent and Broadcom advancing 3.3 per cent. Oracle stood out with a sharp 9.6 per cent increase. These moves highlighted how quickly sentiment can shift in the tech sector, especially amid ongoing debates about AI investments.

Beyond US markets, international developments added to the positive tone. Japan’s Nikkei 225 reached a fresh all-time high, surging 2.8 per cent after the incumbent government secured a historic election mandate. This boost reflected growing confidence in Japan’s economic policies and stability. Treasury yields stayed calm, with the 10-year note holding near 4.20 per cent.

Traders largely ignored news that China encouraged its banks to reduce holdings of US Treasuries, suggesting that markets focused more on domestic factors. In commodities, gold dropped about 0.7 per cent to US$5,023.82 per ounce, while West Texas Intermediate oil fell 0.4 per cent to US$64.13 a barrel. Traders kept an eye on potential supply disruptions in the Strait of Hormuz, but no immediate threats materialised. Bitcoin hovered just under US$71,000, steady after briefly topping that mark over the weekend.

Attention now turns to key economic data releases. Retail sales figures arrive on Tuesday, and CPI inflation numbers follow on Friday. These reports will shape expectations for the Federal Reserve’s next interest rate move. Investors have begun shifting some funds into real-economy sectors, and demand for AI-related tech stocks remains robust, supporting overall index levels. This rotation shows a market balancing innovation hype with practical economic signals.

From my perspective, this setup feels like a fragile equilibrium. The tech rebound offers relief, but if upcoming data disappoints, volatility could return swiftly. Markets often overreact to hints of inflation, and with AI spending under scrutiny, any sign of cooling could pressure gains.

In cryptocurrencies, the market edged up 0.28 per cent to a total capitalisation of US$2.4 trillion over the last 24 hours. This modest gain marks a brief halt after a steep downtrend, aligning closely with traditional stocks. A strong 89 per cent correlation with the S&P 500 points to shared influences from broader economic relief. Bitcoin’s tentative support after a 46 per cent drawdown stands as the main driver. Selective institutional buying has helped stabilise prices.

Secondary factors include sharp pumps in smaller altcoins and slightly upbeat social sentiment around Ethereum accumulations. Looking ahead, the market’s strength depends on Bitcoin maintaining the US$65,000 to US$70,000 range. Dropping below that could push prices back to the US$60,000 yearly low.

Bitcoin’s stabilisation follows a brutal capitulation phase. The total market cap tries to hold at US$2.4 trillion after plummeting 46 per cent from its October 2025 peak. This aligns with Bitcoin testing a critical historical support at the 1.25x realised price level, which historically divides regular corrections from deeper selloffs. The small uptick indicates that the intense selling from January and early February might ease, paving the way for a technical rebound.

Investors should closely monitor Bitcoin’s defence of US$65,000. A failure there might spark fresh liquidations, extending the pain. In my view, this support level acts like a psychological floor. Historical patterns suggest bounces often follow such tests, but current macro uncertainties make outcomes less predictable. The correlation with stocks amplifies risks, as any equity dip could drag crypto lower.

Speculative activity and changes in sentiment add layers to the recovery. While the overall market stayed flat, low-cap altcoins like GPS, AXS, and ZKP surged 20 per cent to 75 per cent on large volume. This shows capital flowing into riskier bets for fast profits, though it falls short of a full altcoin rally. Social sentiment for assets like Ethereum improved to a mildly bullish 4.83 out of 10. On-chain data reveals significant accumulations by major players, such as Bitmine.

For instance, Bitmine, linked to Tom Lee of Fundstrat, recently acquired another 20,000 ETH valued at US$41.08 million from FalconX’s hot wallet. This transaction, highlighted in on-chain tracking, fits a pattern of inflows. Just six days earlier, Bitmine received another 20,000 ETH worth US$46.04 million from the same source. Over the past two weeks, additional batches included 40,320 ETH at US$113.39 million, 38,400 ETH at US$107.99 million, 30,720 ETH at US$86.39 million, another 38,400 ETH at US$107.99 million, 28,800 ETH at US$80.99 million, 26,880 ETH at US$75.59 million, 30,720 ETH at US$86.39 million, 34,560 ETH at US$97.19 million, and 23,040 ETH at US$64.79 million. These moves signal structured buying by institutions, boosting short-term confidence.

Community reactions underscore this as smart money at work. Observers note the buys as strategic positioning rather than random trades. One commenter compared it to aggressive corporate strategies in crypto, while others highlighted the scale of the accumulation amid market fear. Ethereum’s positive whale activity provides a counterweight to broader caution.

From where I stand, these accumulations reveal an underlying belief in crypto’s long-term value. Institutions like Bitmine spot opportunities in dips, betting on future growth. This contrasts with retail hesitation, resulting in an uneven recovery. If more entities follow suit, it could spark broader buying, but isolated actions might not sustain momentum on their own.

The near-term outlook remains guarded. Two key elements will determine the path: Bitcoin’s push to reclaim and defend the US$73,000 resistance level, and the flow direction in US spot Bitcoin ETFs after recent net outflows. The Fear and Greed Index sits at 10, indicating extreme fear, which often precedes relief rallies when buying picks up. Holding above US$70,000 might drive the total cap toward US$2.5 trillion over time.

Without consistent spot demand, prices could revisit last week’s lows near US$60,000. Upcoming stock market data ties in here, as retail sales and CPI could sway Fed decisions, indirectly affecting crypto through risk sentiment. My take is that this moment offers a chance for stabilisation, but fragility persists. The 46 per cent drawdown scarred investors, and rebuilding trust takes time. If Bitcoin holds its ground, we might see a slow grind higher, fuelled by tech’s AI tailwinds and institutional dips.

In conclusion, today’s market action reflects cautious stabilisation across assets. Stocks rebounded on tech strength, easing AI concerns, while crypto paused its slide with help from Bitcoin support and selective buys. The interplay between traditional and digital markets grows clearer with that 89 per cent correlation. Institutional moves, like Bitmine’s ETH hauls, inject optimism, but the outlook hinges on key levels and data.

I see potential for a relief bounce if supports hold, and I warn against overconfidence. Extreme fear levels suggest upside if sentiment flips, but macro headwinds loom. Traders should watch Bitcoin’s US$65,000 to US$70,000 zone closely, as it will dictate whether this uptick endures or fades. Overall, markets catch their breath after tough times, setting up for pivotal days ahead.

 

Source: https://e27.co/crypto-market-cap-hits-us2-4t-again-why-institutional-whales-are-buying-the-dip-20260210/

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