Bitcoin dropped sharply over the weekend, slipping below key support levels as low liquidity and elevated leverage intensified the move. Forced liquidations of long positions accelerated the decline, while broader risk assets also came under pressure amid macro uncertainty and a stronger dollar. While the long-term Bitcoin thesis remains unchanged, the episode underscored how leverage and thin liquidity can still trigger rapid corrections.
Crypto markets saw a sharp sell-off with ETH (-18%) and SOL (-13%), and BTC (-10%) significantly underperforming equities as sentiment fell into Extreme Fear (15). Total crypto market cap dropped to $2.62T, highlighting continued risk-off conditions and broad de-risking across digital assets.
Key Macro Events Last Week:
• Macro drivers dominated markets, the Federal Reserve held rates steady at 3.50–3.75%, reinforcing caution in speculative assets.
• Nomination of Kevin Warsh as next Fed Chair sparked volatility, pressuring risky assets like crypto and gold amid expectations of tighter monetary policy.
• Global markets also reacted to the 56th World Economic Forum in Davos, where policymakers and business leaders discussed growth, inflation, and geopolitical risk, a backdrop shaping risk sentiment.
• European stocks (e.g., IBEX 35) hit new highs even as macro caution persisted worldwide.
Smart Money Moves:
Whales are staying defensive, cutting exposure to legacy altcoins and most memecoins while selectively reallocating. Meme coin activity remains speculative and trading-focused, with no clear accumulation trends, signaling caution rather than a return to risk-on behavior.
Upcoming Macro Events to Watch:
• Feb 3 – JOLTS Job Openings: Measures labor market strength. Strong data may pressure crypto by delaying rate cuts; weaker data could support risk assets.
• Feb 5 – Initial Jobless Claims: A real-time check on employment. Rising claims can boost rate-cut hopes and support crypto.
• Feb 6 – January Jobs Report: Covers jobs, wages, and unemployment. Strong data may weigh on crypto, while weaker numbers often support prices.
More about whales tracking insights, top gainers and losers and weekly performance find in today’s reports on altFINS.