Anndy Lian outlines need for DeFi Howey Test

Anndy Lian outlines need for DeFi Howey Test

Anndy Lian calls for the creation of a customized regulatory framework for DeFi, inspired by the classical Howey Test.

He proposes several guiding principles including the decentralization threshold, functional utility versus speculative intent, transparency, on-chain disclosure, and intermediary liability to ensure consumer safeguards.

 

 

Lian’s recommendations come amid growing scrutiny of the decentralized finance sector, a landscape he has previously dissected by distinguishing true decentralized projects from those retaining centralized elements. His recent regulatory proposals align with past warnings about inflationary risks, particularly the hidden impact of money printing on broader economic stability. For further context on these emerging dynamics, see his analysis of real and fake decentralized projects and his perspective on inflation as hidden in money printing.

 

Source: https://tradersunion.com/news/market-voices/show/1327645-defi-howey-test/

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Fear and greed at 28: Why traders are fleeing crypto right now

Fear and greed at 28: Why traders are fleeing crypto right now
Most regional indices closed lower, weighed down by anxieties over US technology earnings and the looming announcement of President Donald Trump’s nominee for Federal Reserve chair. While Japan’s Nikkei 225 managed to stay slightly in positive territory amid choppy trading, Hong Kong and mainland Chinese benchmarks retreated, ending what had otherwise been a strong monthly rally. The divergence in performance underscored the growing sensitivity of global markets to both domestic policy signals and external shocks.
At the heart of the day’s market dynamics lay two dominant narratives:
  • First, concerns mounted over whether the massive artificial intelligence investments made by US tech giants would translate into tangible returns. Mixed earnings reports from major firms failed to reassure investors, casting doubt on the sustainability of the AI-driven valuation surge that has powered equity markets in recent quarters.
  • Second, anticipation built around the imminent nomination of the next Federal Reserve chair. With interest rate policy hanging in the balance, traders braced for potential shifts in monetary direction under a new leadership aligned with the Trump administration’s economic priorities. These dual uncertainties created a risk-averse backdrop across Asia.
This aversion to risk extended beyond equities into currencies and commodities. The US dollar strengthened as a traditional safe haven, while gold, typically a refuge during geopolitical stress, unexpectedly declined. This unusual move signalled that capital was not rotating into traditional hedges but instead retreating broadly from speculative exposure. Notably, Indian markets bucked the regional trend. The Sensex closed at 82,566.37 and the Nifty at 25,418.90, lifted by domestic optimism ahead of the Union Budget. India’s relative insulation highlighted how localised fiscal expectations can temporarily override global headwinds.
Meanwhile, the cryptocurrency market experienced a sharp contraction, shedding 6.82 per cent in 24 hours to settle at a $2.78 trillion valuation. This decline did not stem from internal protocol failures or regulatory crackdowns but from a cascading geopolitical risk-off event. Specifically, President Trump’s explicit threat of military strikes against Iran triggered a broad flight from all assets perceived as risky.
In this environment, crypto behaved not as a decentralised hedge but as a correlated risk asset, moving in near lockstep with equities and commodities. The correlation between crypto and gold reached an unusually high 88 per cent, confirming that macro forces, not blockchain fundamentals, were driving price action.
The primary catalyst was clear. Escalating US-Iran tensions injected acute uncertainty into financial markets. Investors, fearing broader conflict and potential oil supply disruptions, reduced exposure across the board. Crypto, despite its narrative as a non-sovereign store of value, proved vulnerable to the same macro fears affecting traditional markets. This moment laid bare a critical reality. In times of acute geopolitical stress, crypto still trades as part of the risk spectrum rather than outside it.
Compounding the sell-off was a violent unwinding of leverage. Over US$363 million in Bitcoin long positions were liquidated within 24 hours, a 175 per cent increase from baseline levels. This forced selling created a negative feedback loop. Falling prices triggered more margin calls, which accelerated the decline further.
Market sentiment deteriorated rapidly, with the 

Fear and Greed Index plunging to 28, deep into fear territory. Funding rates turned negative, averaging -0.00215 per cent, indicating that short sellers now dominated the derivatives market and were effectively being paid to maintain bearish positions. Open interest stood at US$608 billion, but its stability remained precarious as longs continued to exit.
Looking ahead, the market faces a pivotal juncture. Technically, the US$2.79 trillion level serves as a crucial support pivot. Holding this zone could allow for stabilisation if geopolitical tensions ease. A decisive break below opens the path toward the yearly low of US$2.42 trillion, particularly if institutional demand continues to wane. Bitcoin ETF flows on January 30 will offer a telling signal. Sustained outflows would confirm that even large players are adopting a defensive stance, reinforcing downward pressure.
This episode underscores a recurring theme in crypto’s maturation. Its increasing integration into the global macro framework means it no longer operates in a vacuum. Instead, it responds to the same geopolitical tremors, monetary policy shifts, and risk sentiment swings that govern equities and commodities. The notion of crypto as a crisis hedge remains aspirational unless it can decouple during true black-swan events, a test it has yet to pass convincingly.
Moreover, the role of leverage cannot be overstated. The US$363 million liquidation wave reveals how fragile market structure can amplify external shocks. While decentralisation promises resilience, the reality is that centralised exchanges, derivative platforms, and leveraged traders create systemic vulnerabilities that mirror traditional finance. Until these structural imbalances are addressed, crypto will remain susceptible to cascading sell-offs driven by macro panic.
In conclusion, January 30, 2026, marked another chapter in crypto’s evolution from fringe experiment to integrated financial asset, one that shares the burdens and behaviours of the broader market. The path forward hinges not on code or consensus alone, but on the unpredictable currents of global politics and investor psychology.
Whether this moment becomes a temporary dip or the start of a deeper correction depends on de-escalation, institutional resolve, and the market’s ability to hold its psychological and technical supports. Until then, crypto remains tethered to the world it once sought to transcend.

 

Source: https://e27.co/fear-and-greed-at-28-why-traders-are-fleeing-crypto-right-now-20260130/

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Low liquidity, high stakes: Why this crypto pullback feels different

Low liquidity, high stakes: Why this crypto pullback feels different

Asian stock markets delivered a fragmented performance as investors navigated a complex mix of regional dynamics, global macro pressures, and escalating geopolitical risk. The day’s trading reflected a broader recalibration in sentiment, with technology stocks pausing after recent gains while safe-haven assets like gold and oil surged amid fears of military escalation in the Middle East. This divergence underscored a market caught between profit-taking, institutional caution, and the search for stability in an increasingly uncertain world.

Japan’s Nikkei 225 edged down 0.2 per cent to 53,251.39 in late morning trade, illustrating the delicate balance between sectoral winners and losers. Financial stocks provided modest support, but that was outweighed by weakness in retail and tech names, which have been central to the index’s rally in recent weeks.

In Hong Kong, the Hang Seng Index opened with more pronounced losses, falling 0.72 per cent to 27,627.11 points, as investor concerns over both local tech exposure and broader macro headwinds weighed heavily. China’s Shanghai Composite mirrored this cautious mood, slipping slightly to 4,139.93 after a mixed open, signalling limited appetite for risk despite ongoing efforts by Beijing to stabilise growth expectations. In contrast, South Korea’s Kospi bucked the trend with a notable 1.4 per cent gain, likely driven by domestic factors or sector-specific strength that temporarily insulated it from the regional drag.

The undercurrents shaping Asia’s mixed session originated far beyond its shores. US stock futures for the S&P 500 dipped as much as 0.3 per cent in early trading, reflecting investor unease following uneven earnings reports from major tech firms like Microsoft and Meta.

Although the S&P 500 closed nearly flat the previous day and the Nasdaq posted a slight gain, the lack of a decisive upward move left markets vulnerable to external shocks. Among the most potent of these was the sudden spike in geopolitical tension, with credible reports suggesting the United States might launch a military strike against Iran. This development sent gold soaring past US$5,550 per ounce, a new all-time high, and pushed West Texas Intermediate crude oil up to US$63.59 a barrel. Simultaneously, the US dollar strengthened, and the Japanese yen weakened to 153.40 per dollar, reinforcing the classic flight-to-safety pattern seen during periods of international instability.

This macro backdrop also spilt into the cryptocurrency market, which declined 0.78 per cent over the past 24 hours to a total valuation of US$3.0 trillion. The move was primarily Bitcoin-led, with the flagship asset dragging the broader ecosystem lower amid institutional caution and reduced liquidity.

A net outflow of US$139 million from US spot Bitcoin ETFs over the same period signalled that even regulated, mainstream crypto investment vehicles were not immune to the prevailing risk-off mood. With Bitcoin dominance holding steady at 58.94 per cent, the market’s fate remained tightly tethered to its largest component, underscoring how concentrated investor sentiment still is around BTC’s price action.

Compounding this weakness was a sharp 14.93 per cent drop in spot trading volume, revealing a market operating on thin ice. Low liquidity environments amplify volatility, making prices more susceptible to large trades and rapid shifts in positioning.

This dynamic played out clearly in the altcoin space, where recently rallied tokens like River saw sharp corrections as traders rushed to lock in profits. The combination of ETF outflows and diminished trading activity created a feedback loop. Weaker prices discouraged fresh buying, which in turn deepened the pullback.

Looking ahead, the immediate trajectory of the crypto market hinges on a pivotal event scheduled for January 30, the White House meeting on the stalled CLARITY Act. This proposed legislation aims to bring regulatory clarity to digital assets, and any tangible progress could reignite bullish sentiment.

Technically, the total market cap now sits within a critical consolidation zone, bounded below by strong support at US$2.92 trillion, the Fibonacci swing low, and above by resistance at US$3.14 trillion, the 38.2 per cent retracement level. A break below support could trigger further selling, potentially targeting the 200-day moving average near US$3.29 trillion, though such a scenario would require sustained negative catalysts.

In my opinion, the digital asset markets represent a necessary recalibration rather than the onset of a deeper downturn. After months of momentum driven by AI optimism, rate-cut expectations, and institutional crypto adoption, markets were due for a breather.

The confluence of geopolitical flare-ups and mixed corporate earnings simply accelerated that adjustment. What matters now is whether policymakers can provide the certainty investors crave. In Washington, the CLARITY Act discussion offers a rare opportunity to replace ambiguity with structure, a move that could restore confidence not just in crypto, but in the broader innovation economy.

Until then, expect cautious consolidation, with capital rotating toward assets that offer either yield, safety, or a clear regulatory footing. The next 48 hours may well determine whether this dip becomes a springboard or a warning sign.

 

Source: https://e27.co/low-liquidity-high-stakes-why-this-crypto-pullback-feels-different-20260129/

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