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Is $1,500 Next for ETH After the ‘Aggressive Deleveraging’?

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Is $1,500 Next for ETH After the 'Aggressive Deleveraging'?

Ethereum has entered an aggressive deleveraging phase, breaking decisively lower after weeks of distribution near the upper boundary of its medium-term range. A key macro driver behind this move appears to be the recent escalation of geopolitical tensions in the Middle East, which has pushed broader risk assets into de-risking mode and amplified existing technical fragilities in the ETH market.

The combination of macro uncertainty, elevated leverage, and vulnerable chart structure has produced a sharp unwind rather than a controlled pullback.

Ethereum Price Analysis: The Daily Chart

On the daily chart, ETH has broken down from the prior ascending structure that extended from the late-2025 lows and has failed to break above the 100-day and 200-day moving averages, which are now both located above the $3,000 mark. This price behavior has confirmed a transition from corrective sideways action into a clear downside trend.

The price has also broken below the first major demand band around the $2,200-$2,000 area, which coincides with a prior consolidation base and the origin of the last strong impulsive advance. Daily RSI has also fallen into deeply oversold territory in the low 20s, indicating stretched short-term conditions.

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However, as long as the market remains capped below the broken moving averages and former support around $2,200, the broader structure continues to point toward a bear-market rally at best rather than a confirmed reversal.

ETH/USDT 4-Hour Chart

The 4-hour chart highlights the velocity of the current sell-off, with ETH cascading lower from the previously defended $2,800–$2,900 support and barely pausing on intermediate levels. The market is now trying to stabilize around the $1,850–$1,900 range, and a mild bullish divergence is emerging on the 4-hour RSI, where momentum has begun to print higher lows despite marginally lower price lows.

This configuration often signals that forced selling pressure is easing and that a short-term relief bounce or sideways consolidation may follow.

Immediate resistance now sits in the $2,100–$2,200 area, with a stronger supply zone at $2,800. Any rebound that stalls below these bands would keep the intraday trend firmly bearish, while a clean breakdown below the recent $1,800 low would pave the way toward the deeper demand zone at $1,500.

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Sentiment Analysis

On the derivatives side, open interest across Ethereum futures has collapsed from elevated levels above 30 billion USD to nearly a third that size, tracking the price decline and signaling a large-scale liquidation cascade rather than an orderly reduction in positioning. This sharp contraction in open interest indicates that a significant portion of leveraged longs has been forced out of the market, with margin calls and auto-deleveraging accelerating the downside once key support levels failed.

While such events are painful in the short term, they also tend to cleanse excess leverage from the system, leaving a lighter positioning backdrop where spot flows and fresh capital, rather than crowded derivatives exposure, can play a larger role in setting the next directional move.

 

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XRP Jumps Nearly 20% as Ripple Teases Major XRPL Upgrades

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XRP Jumps Nearly 20% as Ripple Teases Major XRPL Upgrades

The token is outperforming the broader crypto market amid a string of Ripple announcements.

XRP outperformed the broader cryptocurrency market on Friday, Feb. 6, rising nearly 20% over the past 24 hours.

The token was trading around $1.50, after briefly touching a high near $1.53, per The Defiant’s price page. XRP’s market capitalization now stands at about $91.3 billion. XRP also strengthened against Bitcoin (BTC), gaining more than 13% on the BTC pair, according to CoinGecko. Meanwhile, 24-hour trading volume climbed to roughly $16.5 billion.

The rally came as investor sentiment improved following a series of Ripple announcements this week, with the latest being the company teasing major upgrades to the XRP Ledger (XRPL) on Feb. 5.

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In a blog post, Ripple outlined how new and upcoming features on the XRP Ledger would expand XRP’s real-world utility beyond payments. The company also said that XRP is increasingly being used across stablecoin settlement, FX, tokenized assets, and lending.

“With each use case, XRP’s role becomes more intertwined in institutional finance, either as the asset being moved, the bridge facilitating exchange, or the reserve currency backing network security,” the post reads.

Earlier this week, the team also announced that Ripple Prime added support for Hyperliquid – the largest decentralized perpetual futures platform by trading volume and open interest (OI), according to DeFiLlama. The move aims to provide institutional clients with on-chain derivatives liquidity through Ripple’s prime brokerage platform.

“At Ripple Prime, we are excited to continue leading the way in merging decentralized finance with traditional prime brokerage services, offering direct support to trading, yield generation and a wider range of digital assets,” said Michael Higgins, International CEO, Ripple Prime. “This strategic extension of our prime brokerage platform into DeFi will enhance our clients’ access to liquidity, providing the greater efficiency and innovation that our institutional clients demand.”

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XRP’s rebound comes amid a broader market downturn that has stretched for weeks. Bitcoin (BTC) is currently trading under $70,000 – a price point not seen since Nov. 2024. Meanwhile, Ethereum (ETH) is currently changing hands at $2,000, down 25% on the week.

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Gold Below $5,000 as Firmer Dollar Weighs

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Stocks Little Changed After Fed Decision

Gold prices edged lower in early trading, holding below the $5,000 mark in the absence of fresh catalysts and amid a stronger dollar.

Futures in New York fell 0.1% to $4,944 a troy ounce, while the U.S. dollar index—which measures the greenback against a basket of major currencies—is up 0.1% at 97.71.

“A stronger USD weighed on investor appetite,” ANZ analysts said. “This offset any gains coming from rising haven buying as geopolitical tensions rise in the Middle East.”

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Bitcoin Dips to $60k, TRM Labs Reaches Crypto Unicorn Status

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Bitcoin Dips to $60k, TRM Labs Reaches Crypto Unicorn Status

Cryptocurrency markets experienced a brutal sell-off this week as investor concerns grew over stagnating US liquidity following US President Donald Trump’s nomination of Kevin Warsh to lead the Federal Reserve.

Bitcoin exchange-traded funds (ETFs) recorded three consecutive days of outflows, with $431 million exiting on Thursday, according to data from Farside Investors. Bitcoin’s (BTC) price briefly dipped to $60,074 on Friday before recovering above $64,930 as of 7:49 a.m. UTC.

Warsh — who previously served as a Fed governor from 2006 to 2011 — is expected to continue the interest rate cut trajectory. His nomination may also signal that broader market liquidity is expected to “stabilize rather than meaningfully expand,” Thomas Perfumo, economist at crypto exchange Kraken, told Cointelegraph.

The industry recorded its 10th-largest liquidation event on Jan. 31, as more than $2.56 billion in leveraged positions were wiped out, according to derivatives data platform CoinGlass.

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Top 10 largest liquidation events in crypto history. Source: Coinglass

TRM Labs completes $70M investment round at $1B, becomes crypto unicorn

Blockchain intelligence platform TRM Labs completed a $70 million Series C funding round, valuing it at $1 billion, becoming the latest crypto company to reach unicorn status.

The investment round was led by seed investor Blockchain Capital, with participation from Goldman Sachs, Bessemer Venture Partners, Brevan Howard Digital, Thoma Bravo, Citi Ventures and Galaxy Ventures, according to a Wednesday news release.

TRM Labs seeks to equip public and private institutions with AI solutions that combat cybercrime. The company defends against illicit activities that increasingly rely on automation.

“At TRM, we’re building AI for problems that have real consequences for public safety, financial integrity, and national security,” wrote Esteban Castaño, co-founder and CEO of TRM Labs.

“This funding allows our world-class team — and the people who will join us next — to innovate alongside institutions on the front lines of the most consequential threats, and expand the potential of AI to meaningfully improve how our critical systems are protected.”

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The $70 million round shows that capital is flowing into blockchain analytics platforms seeking to stop the spread of AI-fueled scams and cyberattacks, including from large traditional institutions.

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Avalanche tokenization hits Q4 high as BlackRock’s BUIDL expands onchain

Blockchain network Avalanche saw increasing institutional adoption across tokenized money market funds, loans and indexes in the fourth quarter, driving the value of real-world assets (RWAs) on the layer 1 to a new high.

The total value locked of tokenized RWAs on Avalanche rose 68.6% over the fourth quarter of 2025 and nearly 950% over the year to more than $1.3 billion, boosted by the $500 million BlackRock USD Institutional Digital Liquidity Fund (BUIDL) that launched in November, Messari research analyst Youssef Haidar said in a Jan. 29 report.

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Fortune 500 fintech FIS partnered with Avalanche-based marketplace Intain to launch tokenized loans in November, further boosting Avalanche’s TVL, Haidar said. Intain enables 2,000 US banks to securitize over $6 billion worth of loans on Avalanche.

The S&P Dow Jones also partnered with Dinari, an Avalanche-powered blockchain, to launch the S&P Digital Markets 50 Index, which tracks 35 crypto-linked stocks and 15 crypto tokens on Avalanche.

Change in Avalanche real-world asset tokenization over the last 12 months. Source: Messari

Traditional finance firms are increasingly confident about experimenting with tokenization, as the Securities and Exchange Commission has become more open to crypto products over the past year.

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ParaFi Capital makes $35M investment in Solana-based Jupiter

Jupiter said it has secured a $35 million strategic investment from ParaFi Capital, marking the first time the Solana-based onchain trading and liquidity aggregation protocol has taken outside capital after years of bootstrapped growth.

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The transaction involved token purchases at market prices with no discount and an extended lockup period and was settled entirely in Jupiter’s JupUSD stablecoin, the companies said. Financial terms beyond the $35 million investment were not disclosed.

Decentralization, Venture Capital, DeFi, Solana
Source: Jupiter

The investment comes as Jupiter has processed more than $1 trillion in trading volume over the past year and expanded beyond swap routing into perpetuals, lending and stablecoins, according to the company.

The deal also included warrants allowing ParaFi Capital to acquire additional tokens at higher prices, a structure the companies said was intended to reflect long-term alignment. 

The investment follows a recent expansion of Jupiter’s product offerings. In October, Jupiter rolled out a beta version of its onchain prediction market developed with Kalshi, followed in January by the launch of JupUSD, a Solana-native, dollar-pegged stablecoin built in partnership with Ethena Labs.

Jupiter’s native token (JUP) was up around 9% over the past 24 hours, according to CoinGecko data.

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Decentralization, Venture Capital, DeFi, Solana
Source: CoinGecko

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Aave winds down Avara, phases out Family wallet in DeFi refocus

Aave Labs said it is sunsetting its “umbrella brand” Avara in the company’s latest move to refocus on decentralized finance and simplify its branding.

Aave founder and CEO Stani Kulechov posted Tuesday on X that Avara, a company encompassing projects including the Family crypto wallet and previously the social media platform Lens, “is no longer required as we go all in on bringing Aave to the masses.”

Kulechov said the Apple iOS-based Family crypto wallet was also being wound down as the team has “learned that onboarding millions of users requires purpose-built experiences, such as savings, rather than generic, open-ended wallet experiences.”

The move marks Aave’s latest effort to refocus on products such as its flagship lending protocol as the project handed stewardship of Lens to the Mask Network last month, with Kulechov saying Aave’s participation in the protocol would be reduced to an advisory role so it can focus on DeFi.

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Source: Stani Kulechov

Kulechov said in his latest post that Aave was “now united as one team of world-class designers, engineers, and smart contract experts, aligned around a single mission: bringing DeFi to everyone.”

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Step Finance treasury wallets breached, $27M in SOL drained as STEP crashes 90%

Step Finance, a decentralized finance portfolio tracker on Solana, disclosed a security breach that led to the compromise of several treasury wallets, triggering a sharp sell-off in its native token.

“Earlier today, several of our treasury wallets were compromised by a sophisticated actor during APAC hours. This was an attack facilitated through a well-known attack vector,” the platform wrote in a post on X, adding that they have taken “remediation” steps.

Onchain data reviewed by blockchain security firm CertiK shows that roughly 261,854 Solana (SOL) (worth around $27.2 million) was unstaked and transferred from Step Finance-controlled wallets.

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Step Finance has not yet confirmed the total scale of the losses. The team also did not disclose how the attacker gained access, nor whether the incident stemmed from a smart contract flaw, compromised keys or an internal access issue. It also remains unclear whether any user funds were affected, beyond protocol-owned assets.

The compromised transaction. Source: Certik

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DeFi market overview

According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the red.

The privacy-preserving Zcash (ZEC) token fell 35% to record the week’s biggest decline in the top 100, followed by the Story (IP) token, down 34% during the past week.

Total value locked in DeFi. Source: DefiLlama

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.