In markets
With the blame game over the October 10 flash crash still ongoing — OKX CEO and Cathie Wood blame Binance, but CZ denies it — crypto markets saw the tenth biggest single day liquidation event on the weekend with A$3.74B (US$2.6B) wiped out. Over four days, around A$7.2B (US$5B) of leveraged trades were flushed from the system.
Bitcoin has now experienced four consecutive down months, which would be perfectly in keeping with the end of the four-year cycle. “So far, history is repeating,” said RektCapital. But this was far from a crypto-only crash, with the extraordinary precious-metals bubble popping on Friday US time, wiping 31.4% from silver and 9% from gold. The shock losses spooked crypto investors and global markets.
The common explanation for the metals crash was President Trump’s nomination of Kevin Warsh to chair the Federal Reserve. He’s seen as hawkish, inflation-focused and unlikely to aggressively cut interest rates or to fire up the money printer (some think this narrative is overblown, however). The US government is partially shut down, but a last-minute deal will reportedly see it reopen this week.
Bitcoin fell as low as A$107.4K (US$74.6K), but at the time of writing, it was trading at A$112,803 (US$78,713), down 11.2% on the same time last week. Ethereum lost 19.5% to trade around A$3,364 (US$2,343), but Goldman Sachs has just released a report saying the fundamentals remain stronger than during DeFi Summer. Solana lost 16.2%, Dogecoin lost 12% and both XRP and Cardano lost 15.4%. The Crypto Fear and Greed Index is at 17, or Extreme Fear.
From the OTC desk
Headline
Body Text
OTC desk activity
- TBC
- TBC
Key Economic Calendar Events (AEDT)
- Wednesday, Feb 04 2026 – 09:00 PM – EA Inflation Rate YoY (Consensus 1.7%)
- Thursday, Feb 05 2026 – 11:30 AM – AU Balance of Trade (Consensus A$3.4B)
- Thursday, Feb 05 2026 – 11:00 PM – GB BoE Interest Rate Decision (Consensus 3.75%)
- Friday, Feb 06 2026 – 12:15 AM – EA ECB Interest Rate Decision (Consensus 2.15%)
- Sunday, Feb 08 2026 – JP Japanese General Election
In headlines
Quick turnaround or further falls?
Analysts are divided on where the markets will go next. Michael van de Poppe notes that Bitcoin’s MVRV Z-score (market value to realised value) is lower than during the bear market bottoms in 2015, 2018, 2020 and 2022. “That’s how deep we’re in the bear market, and yes, we’re close to the end of it,” said van de Poppe. The Z score is currently around -2, and historically, scores below -1 have preceded major bull runs. Tron founder Justin Sun believes crypto is “wildly undervalued right now”, and Wintermute CEO Evgeny Gavoy predicts the bear market won’t last long. DCG founder Barry Silbert believes the weekend’s liquidation flush was a healthy reset. “This is a gift from the crypto gods. Clearing out the leverage, crap tokens. A massive capital rotation into crypto is about to begin.” However, Galaxy’s Alex Thorn says that on-chain data and the charts suggest Bitcoin will keep going down. He notes that historically, a 40% drawdown has always been followed by a 50%+ drawdown soon after. Options trader Eric Crown told CoinDesk to ignore the hopium because Bitcoin will keep correcting down.
Strategy and Bitmine hit hard by crypto crash
The Bitcoin price dipped below Strategy’s average buy price this week, and founder Michael Saylor responded by posting a picture of himself jogging. Strategy bought 855 more Bitcoin. Much was made of Bitmine being more than US$6.6 billion (A$9.48B) down on its ETH investments at one point, but Bitmine is debt-free and is generating US$25M (A$36M) a month from staking. It just bought another 41,788 ETH.
ISM Manufacturing PMI hits 52.6
The crypto community has latched on to new manufacturing data as if it were a life raft. The US ISM Manufacturing Purchasing Managers Index hit a 40-month high of 52.6 overnight, well above expectations of 48.5. A reading above 50 means expansion, below 50 means contraction. “For risk assets, this is fuel,” said Milk Road. Readings above 50 have been associated with Bitcoin bull markets in the past, and some believe it’s the business cycle, not the halving, that drives the Bitcoin price. Analyst Ben Cowen, however, said that a high figure is not always correlated with rising Bitcoin prices.
Clarity Act negotiations continue
Avoiding a government shutdown may give the stalled crypto market structure legislation the time it needs to reach consensus. The US Senate Agriculture Committee voted to advance its version of the bill along party lines without Democratic support. The Democrats are unhappy about ethics provisions, consumer protections and the independence of the CFTC. Democratic Senator Cory Booker had supported November’s draft legislation but now says, “the product before us today is not the bipartisan draft that we were working on.” The Banking Committee is also yet to advance its version of the bill. If it does so, the two bills will need to be combined before a final Senate vote.
White House meeting for banks and the crypto industry
Policy experts from the crypto and banking industries are meeting at the White House today to try and reach a compromise on stablecoin yield to allow the crypto market structure legislation to proceed. The banks warn that allowing yield could drain US$6.6 trillion (A$9.49T) from the banking system and drive up lending costs for consumers and businesses. Crypto execs see the ban on yield as undermining the future of finance and their profits. The Wall Street Journal called Coinbase CEO Brian Armstrong “Enemy No.1 on Wall Street.” TD Cowen says President Trump may need to personally intervene to force a compromise. One key fact that might help the crypto bill get over the line is the fact that pro-crypto super PAC Fairshake has amassed US$193 million (A$277.5M) to support pro-crypto candidates in the 2026 elections.
Crypto is scaling even as prices are crashing
The Ethereum ecosystem hit an astonishing new all-time high of 75,862 TPS. MegaETH was running at 41,335 TPS, and Lighter at 34,034 TPS. Until recently, the more traditional L2s were running around 100 TPS, but Arbitrum this week peaked at 6,573 TPS, and Base hit 5,073 TPS. Even the Ethereum L1 reached 84 TPS in the past 24 hours. Solana peaked at 4,336 TPS during the market crash. In other Ethereum news, 75,100 ETH that have sat untouched since the DAO hack in 2016 will be staked, with the resulting yield going to Ethereum security-related projects (e.g., audits, incident response, wallet security, etc.).
Asian crypto news
Asian DAT Trend Research has dumped 73K ETH to repay Aave loans. South Korea’s Financial Supervisory Service has started deploying AI to identify and combat crypto market manipulation. Hong Kong authorities are preparing a draft crypto regulatory framework for submission this year. Independent Reserve Singapore CEO Lasanka Perera spoke with HRM Asia about the importance of leadership, trust and teamwork. Japan’s largest wealth management company Nomura, had been reducing its crypto exposure after Q3 losses, but says it plans to expand in the medium term.
The Moonshot Dispatch
Join us every Tuesday at 3 pm (AEDT) as we cover the latest crypto news, price movements and all the Bitcoin banter you may have missed. Tune in weekly on Twitter/X, YouTube, & TikTok.
Until next week, happy trading!
