Bitcoin surged sharply this week, briefly nearing $70,000 before pulling back. The move sparked debate across the market: has Bitcoin finally bottomed, or is this just another relief rally inside a broader bear phase?

Multiple on-chain, derivatives, and institutional indicators show early signs of stabilization. However, key signals still point to a fragile recovery rather than a confirmed bullish reversal.

Options Market Shows Fragile Conditions, Not Strong Support

Bitcoin’s options positioning recently shifted into what traders call a negative gamma regime, according to Glassnode’s GEX heatmap.

In simple terms, gamma measures how options market makers hedge risk. When Bitcoin sits in a negative gamma zone, dealer hedging tends to amplify price moves. 

That means rallies can accelerate quickly—but so can selloffs.

The heatmap also shows fewer strong resistance “gamma walls” above current prices. This creates less friction for upward moves, which helps explain Bitcoin’s sudden surge. 

However, it also means the market lacks structural stability. 

Without strong hedging support, price moves remain fragile and prone to reversal.

Bitcoin Spot Demand Is Improving for the First Time in Months

CryptoQuant data shows Bitcoin’s apparent demand, which measures net accumulation versus new supply, has turned positive for the first time since November.

This is an important early signal. When demand exceeds supply, it suggests buyers are stepping in and absorbing coins from sellers.

However, one positive shift does not confirm a full reversal. During past bear markets, temporary demand increases often occurred before further consolidation. 

A sustained trend of rising demand over several weeks would provide stronger confirmation.

Short-Term Holders Are Still Selling at Losses

Another key indicator comes from CryptoQuant’s short-term holder profit and loss data, which tracks whether newer investors are selling at gains or losses.

The data shows short-term holders have been selling at losses consistently since late January. Several major loss spikes occurred in early February and again recently.

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This pattern is known as capitulation, where weaker investors exit the market. Capitulation is common near market bottoms, because stronger buyers absorb those losses.

However, the signal has not fully reversed. 

Until short-term holders begin selling at profits again, analysts warn that rallies can become “exit liquidity,” where trapped investors sell into strength rather than holding.

Technical and Historical Data Suggest Selling Pressure Is Easing

Bitcoin’s relative strength index (RSI), a momentum indicator, recently recovered after reaching extremely oversold levels in early February. This suggests selling pressure has weakened.

Historically, such RSI recoveries often lead to short-term rebounds.

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Quarterly performance data also shows Bitcoin rarely experiences multiple consecutive quarters of heavy losses. 

While this pattern does not guarantee a bottom, it supports the view that the market may be entering a stabilization phase.

Institutional Flows Still Show Weakness

Institutional positioning remains a key concern. Earlier data showed Bitcoin ETFs experienced sustained outflows, and SEC filings revealed large investment advisors and hedge funds reduced exposure significantly in late 2025.

This suggests institutional demand has not fully returned. Strong bull markets typically require consistent inflows from large investors.

What did 13F filers do with the Bitcoin ETFs in Q4??

In what should not be much of a surprise — they were sellers. Advisors and Hedge Funds (the two largest holder categories) were the biggest sellers. Overall 13F Filers sold ETF shares equivalent to ~25,000 Bitcoin in 4Q 2025. pic.twitter.com/0MEbzXVDb1

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— James Seyffart (@JSeyff) February 24, 2026

Early Bottoming Signs, But Bull Market Not Confirmed

Bitcoin is showing several early bottoming signals. Spot demand is improving, capitulation appears to be getting absorbed, and technical indicators suggest selling pressure is fading.

However, key confirmation signals are still missing.

Short-term holders remain in loss territory, institutional flows remain weak, and options market structure shows fragile conditions.

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For now, Bitcoin’s rally appears more consistent with a relief bounce than a confirmed bull reversal. 

A sustained recovery will likely require stronger demand, renewed institutional inflows, and price stability above key resistance levels.

TLDR

• Kraken has launched Flexline, a fixed-rate crypto-backed loan product for Kraken Pro users.
• The loans offer terms ranging from two days to two years with annual rates between 10% and 25%.
• Users can borrow against supported cryptocurrencies without selling their digital assets.
• Kraken holds collateral in segregated wallets and includes it in its Proof of Reserves attestations.
• The platform may liquidate collateral if users breach maintenance requirements or fail to repay on time.

Kraken has launched Flexline, a fixed-rate crypto-backed loan service for Kraken Pro users. The product allows clients to borrow against digital assets without selling them. Kraken said it designed the service for advanced and institutional traders seeking liquidity.

Kraken rolls out Flexline with fixed terms and instant funding

Kraken offers loan terms from two days to two years with fixed annual rates. The platform lists annual percentage rates between 10% and 25%. However, Kraken has not disclosed specific loan-to-value ratios.

Users can post supported cryptocurrencies as collateral and receive funds almost instantly. They can receive proceeds in crypto or stablecoins based on regional eligibility. They can trade or withdraw the funds on the platform where permitted.

Kraken holds collateral in segregated wallets and includes it in Proof of Reserves attestations. The exchange said these attestations verify client assets on a 1:1 basis. Collateral faces liquidation if users breach maintenance requirements or miss repayment at maturity.

Borrowers can repay loans early using their account balances on Kraken Pro. However, Kraken charges an early repayment fee for such actions. The product remains unavailable in several jurisdictions, including the United States and the United Kingdom.

Kraken excludes Australia, Brazil, Canada, India, New Zealand, Switzerland, and the United Arab Emirates. The exchange restricts access based on local regulations and internal compliance standards.

Exchanges and DeFi platforms expand crypto-backed lending services

Coinbase has expanded its own crypto-backed loan product for eligible United States users. It allows borrowing up to $100,000 in USDC against assets such as XRP, Dogecoin, Cardano, and Litecoin.

The company lets users access liquidity without selling their tokens. It supports multiple digital assets as collateral under the updated program.

Outside exchanges, mortgage lender Rate has introduced a program called RateFi. The initiative allows qualified borrowers to use verified cryptocurrency holdings during underwriting.

Rate permits digital assets to count as reserves and sometimes as income. Borrowers can therefore avoid liquidating their holdings to meet requirements.

Decentralized finance lending protocols also continue to grow in total value locked. Data from DefiLlama shows about $51.9 billion locked across DeFi lending markets.

Active borrowing across these protocols stands near $30.8 billion, according to the same data. Aave holds nearly $26.9 billion in total value locked.

Morpho follows with around $5.8 billion in total value locked. On Feb. 15, Apollo Global Management partnered with Morpho to support blockchain-based lending infrastructure.

Apollo said it could acquire up to 90 million MORPHO tokens under the agreement. The asset manager oversees about $940 billion in assets.

Bitcoin BTC$68,541.21 experienced a volatile overnight trading session, rising by as much as 3.7% before giving back some of those gains.

The largest cryptocurrency remains in the black since midnight UTC, up by 2.4% to trade around $65,600. That’s still within a price range that has persisted over the past three weeks.

The altcoin market is also showing signs of life, with layer-1 tokens solana (SOL) and ADA$0.2975 each putting in a 4.5% rally while tokens including VIRTUAL, MORPHO and ETHFI climbed more than 10%.

U.S. equity index futures rose alongside the crypto market. Silver’s 4% rise since midnight suggests the broader risk-asset rally is speculative rather than news-driven.

The average crypto relative strength index (RSI) indicator has moved out of oversold territory back into a neutral zone, suggesting a period of consolidation might be on the cards on Wednesday.

Derivatives positioning

• Cumulative crypto futures open interest (OI) has risen by over 1.5% to $93.5 billion, although much of that notional growth comes from spot price appreciation rather than capital inflows.
• OI in bitcoin and ether (ETH) futures has largely held steady over 24 hours, with futures tied to tether gold (XAUT) seeing a 12% decline in open positions. Capital seems to be rotating out of gold-linked assets.
• TRX, AVAX, SOL, LINK and HBAR stand out as coins with the highest 24-hour cumulative volume delta. Positive CVD readings indicate that buying demand is outpacing selling demand.
• Bitcoin’s annualized 30-day implied volatility index, BVIV, dropped to 56%, reversing the early week pop to 65% to suggest market calm. This is supportive of continued recovery in BTC’s price. Ether’s volatility displays a similar pattern.
• On Deribit-listed bitcoin options, the $60,000 put has become the most popular play, reflecting downside concerns. Puts, or bearish bets, for both BTC and ETH continue to trade pricier than calls, or bullish ones.

Token talk

• The “altcoin season” indicator hit its highest level since early January on Wednesday, buoyed by rallies across the board.
• AI agent token VIRTUAL led the pack, rising 15.5% since midnight and more than 20% in the past 24 hours to make it the best-performing asset in the CoinDesk 80 (CD80) index, which added 1.7%.
• Restaking token ETHFI also rose more than 10% in the past 24 hours after CEO Mike Silagadze hinted at potentially rolling out a stablecoin.
• Lending platform Morpho’s native token rounded off Wednesday’s altcoin rally. It has now risen by 45.9% over the past 30 days after a 15% gain over the past 24 hours.
• On the flip side, toncoin (TON) and pippin (PIPPIN) are both in the red over the past 24 hours after increasing in value earlier this week, indicating asset rotation among traders and investors.

TLDR

• Russia will begin real-world testing of the digital ruble in coordination with the central bank and finance ministry.
• Prime Minister Mikhail Mishustin announced the testing plan during a speech before the State Duma.
• Authorities scheduled a phased rollout of the digital ruble starting in September 2026.
• Major banks and large merchants must enable digital ruble payments from the first stage of implementation.
• Smaller banks and companies will have until September 2028 to comply with the new requirements.

Russia has confirmed it will begin real-world testing of the digital ruble soon, according to Prime Minister Mikhail Mishustin. He announced the move before the State Duma while lawmakers reviewed the government’s annual report. At the same time, authorities prepared new legislation to legalize cryptocurrencies under strict state control.

Russia Moves Toward Digital Ruble Rollout

Prime Minister Mikhail Mishustin said the government will start active testing of the digital ruble shortly. He spoke before the State Duma and outlined coordination with financial authorities.

He said, “Regarding the digital ruble, my colleagues from the Bank of Russia and the Ministry of Finance and I will now begin actively testing it.”

He added that officials must build infrastructure and assess transactions before defining volumes and usage methods.

The Central Bank of Russia created the digital ruble as a central bank digital currency. It represents the third form of national fiat after cash and electronic bank money. The bank launched a limited pilot in August 2023 and involved selected participants. Authorities had planned a public launch for mid-2025, then postponed it to fall 2026 after President Vladimir Putin urged wider adoption.

Officials scheduled a phased introduction beginning September 1, 2026. Major banks and large merchants must offer digital ruble services from that date. Universal banks and firms with annual revenue above 30 million rubles will have one extra year to comply. Smaller institutions and companies must enable transactions by September 1, 2028, while very small retailers remain exempt.

Crypto Legalization Advances Under Strict Controls

Russian authorities have also prepared legislation to regulate decentralized digital assets. The Finance Ministry and the central bank drafted a bill that defines the structure of the domestic crypto market. According to reports, the draft will legalize activities such as investment and trading. The plan follows a central bank proposal published in December to classify cryptocurrencies and stablecoins as monetary assets.

Lawmakers aim to adopt the framework by July 1 under the current timetable. The bill sets a $4,000 cap on crypto purchases for non-qualified investors. It also establishes capital requirements for domestic platforms and strict compliance standards. Global exchanges must register local subsidiaries and store user data inside Russia or face blocking measures.

The regulatory push also affects digital ruble accounts. A February report stated that the Bank of Russia updated rules for opening such accounts. These rules introduce tighter procedures for users and service providers. Authorities continue to align both the CBDC rollout and crypto regulation under a unified legal framework.

If history rhymes, here are the best ETH entry levels for the long-term.

After barely setting a new price record last summer at nearly $5,000, ETH joined the rest of the market in the post-October slump and dumped by almost 50% in months. It tried to resume its run in mid-January when it jumped to $3,400, but it was rejected again, and the subsequent correction pushed it south to $1,800 on a couple of occasions.

Although it has managed to defend that level for now, it still trades 45% lower than its mid-January peak. Substantial sell-offs have continued, while one popular analyst laid out what could be valid entry points for long-term exposure.

Sell-Offs Continue

If we compare ETH’s price with net flows into spot Ethereum ETFs, we will see a strong resemblance in investor behavior and price moves. For instance, the cumulative net flows peaked at over $15 billion in early October before the massive October 10 crash. Since then, outflows have consistently dominated, with investors pulling out well over $3 billion by February 24.

In addition, Ethereum’s co-founder has also joined the selling spree. CryptoPotato has reported on several occasions on Vitalik Buterin’s substantial disposal of ETH tokens for the past several weeks. Most recent on-chain data shows that he has dumped roughly 17,000 ETH in less than a month, valued at around $34 million.

In a post titled “Vitalik Buterin Is Selling Ethereum Near the Bottom,” renowned analyst Ali Martinez explained why the co-founder might regret his timing as the bottom could be closer than expected.

ETH Entry Points

Martinez said one of the most reliable “bottom-detection metrics” for the largest altcoin – the MVRV Ratio – is currently at 0.78, while the asset has neared or reached a macro bottom at levels below 0.80.

However, his disclaimer indicated that just because Ethereum is currently undervalued according to on-chain metrics, this doesn’t mean that its price cannot go any lower – “especially during heavy distribution phases.”

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If another correction is to occur, the analyst outlined the most critical levels that could hold its downfall – $1,800 (which was tested yesterday), followed by $1,584 (first major support below), $1,238 (secondary macro support), and $1,089 (deeper capitulation zone). Martinez believes these precise levels could be proper entry zones.

“If history rhymes, accumulation below $1,800 – particularly near $1,584, $1,238, and $1,089 – could offer strong long-term positioning. But, volatility is likely to persist before a confirmed bottom forms.”

By Omkar Godbole (All times ET unless indicated otherwise)

Traders chasing alpha might want to take a look at U.S.-listed bitcoin BTC$68,245.27 mining stocks. Some of these companies are surging, boldly decoupling from the cryptocurrency’s choppy price action.

Shares in Terawulf (WULF) have gained 31% this month, even as bitcoin’s spot price has dropped nearly 17%. Cipher Digital (CIFR) and HUT 8 (HUT) have gained 8% and 6%, respectively, while Core Scientific (CORZ) is largely steady.

According to Markus Thielen, founder of 10x Research, these are among the most heavily shorted stocks by hedge funds and could gain due to positive economics.

“With long-term energy contracts secured at attractive rates, these firms possess a strategic advantage that extends well beyond pure Bitcoin mining,” Thielen said in a note to clients.

He added that capital is increasingly flowing toward structural winners, while legacy operators risk being left behind.

Bitcoin has bounced to over $65,000, likely tracking gains in futures tied to the Nasdaq 100 index. The advance occurred even though President Donald Trump didn’t mention crypto in his State of the Union address.

Spot bitcoin ETFs recorded $257.7 million in net inflows on Tuesday, the most since early February, according to data from SoSoValue. Analysts said inflows need to hold up over the coming days to spark a real market rebound from this slump.

In terms of price, bitcoin is trading close to well-watched pivots, Vikram Subburaj, CEO of Mumbai-based Giottus.com, said.

“A sustained break below $60,000 is widely framed as a downside trigger, with ~$57,500 cited as the next notable level. Conversely, reclaiming $72,000-$75,000 would be a cleaner signal that risk appetite is returning,” Subburaj said in an email.

In traditional markets, the Dollar Index reversed early losses, pressuring dollar‑denominated assets such as gold and bitcoin. Oil prices slipped as U.S. stockpiles surged, though downside remained muted amid the risk of a potential military conflict between the U.S. and Iran. Stay alert.

Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today

What to Watch

For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead“.

• Crypto
  • Feb. 25, 1 p.m.: SwissBorg to host its “biggest keynote ever.”
  • Feb. 25: The Sandbox Season 7 starts.
• Macro
  • Feb. 25, 4:30 p.m.: U.S. Fed balance sheet for week ending Feb. 25 (Prev. $6.61T)
• Earnings (Estimates based on FactSet data)
  • Feb. 25: Circle (CRCL), pre-market, $0.16
  • Feb. 25: Core Scientific (CORZ), post-market, -$0.18
  • Feb. 25: MARA Holdings (MARA), post-market, -$0.11
  • Feb. 25: Hut 8 (HUT), pre-market, -$0.13
  • Feb. 25: NVIDIA (NVDA), post-market, $1.50

Token Events

For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead“.

• Governance votes & calls
  • Feb. 25: EigenCloud to host a livestream with Puffer Finance on “Preconfirmations & the Future of Rollups”
  • The Sandbox DAO is voting to pause operations and transfer control to the project team to realign with “The Sandbox 3.0”. The proposal currently has the support of 80% of voters. Voting ends Feb. 25.
  • Decentraland DAO is voting to create a customizable “Windfall Lotto Scene” template for land owners. Voting ends Feb. 25.
• Unlocks
  • Feb. 25: Humanity (H) to unlock 4.37% of its circulating supply worth $17.71 million.
• Token Launches

Conferences

For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead“.

Market Movements

• BTC is up 2.37% from 4 p.m. ET Tuesday at $65,564.62 (24hrs: +3.55%)
• ETH is up 3.31% at $1,915.35 (24hrs: +4.89%)
• CoinDesk 20 is up 2.97% at 1,901.09 (24hrs: +4.17%)
• Ether CESR Composite Staking Rate is up 2 bps at 2.83%
• BTC funding rate is at -0.0007% (-0.7643% annualized) on Binance

• DXY is unchanged at 97.82
• Gold futures are up 0.58% at $5,206.50
• Silver futures are up 3.82% at $91.50
• Nikkei 225 closed up 2.20% at 58,583.12
• Hang Seng closed up 0.66% at 26,765.72
• FTSE is up 0.79% at 10,764.79
• Euro Stoxx 50 is up 0.5% at 6,147.32
• DJIA closed on Tuesday up 0.76% at 49,174.50
• S&P 500 closed up 0.77% at 6,890.07
• Nasdaq Composite closed up 1.04% at 22,863.68
• S&P/TSX Composite closed up 0.57% at 33,970.38
• S&P 40 Latin America closed up 1.53% at 3,800.72
• U.S. 10-Year Treasury rate is up 2.1 bps at 4.054%
• E-mini S&P 500 futures are up 0.11% at 6,911.25
• E-mini Nasdaq-100 futures are up 0.15% at 25,066.25
• E-mini Dow Jones Industrial Average Index futures are unchanged at 49,277.00

Bitcoin Stats

• BTC Dominance: 58.52% (+0.13%)
• Ether-bitcoin ratio: 0.02917 (0.9%)
• Hashrate (seven-day moving average): 1,034 EH/s
• Hashprice (spot): $28.69
• Total fees: 2.7 BTC / $171,903
• CME Futures Open Interest: 114,890 BTC
• BTC priced in gold: 12.6 oz.
• BTC vs gold market cap: 4.38%

Technical Analysis

• The chart shows daily price swings in solana (SOL) in candlestick format.
• The drop from September highs could be described as a stair-step decline, where prices fall, then move sideways in consolidation, and then resume selling.
• Lately, the price has been consolidating between roughly $75 and $91. A move below the lower end of the range would imply resumption of the broader downtrend, potentially yielding a deeper slide.

Crypto Equities

• Coinbase Global (COIN): closed on Tuesday at $162.03 (+1.12%), +2.14% at $165.49 in pre-market
• Circle Internet (CRCL): closed at $61.37 (+0.33%), +16% at $71.00
• Galaxy Digital (GLXY): closed at $21.54 (+5.90%)
• Bullish (BLSH): closed at $30.76 (+0.42%), -1.63% at $30.26
• MARA Holdings (MARA): closed at $8.05 (+2.16%), +1.61% at $8.18
• Riot Platforms (RIOT): closed at $16.50 (+5.43%), +1.94% at $16.82
• Core Scientific (CORZ): closed at $17.87 (+5.80%), +0.78% at $18.01
• CleanSpark (CLSK): closed at $10.35 (+5.40%), +1.93% at $10.55
• CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $42.71 (+7.42%)
• Exodus Movement (EXOD): closed at $9.76 (+2.20%)

Crypto Treasury Companies

• Strategy (MSTR): closed at $124.61 (+0.73%), +2.51% at $127.74
• Strive (ASST): closed at $7.16 (-2.65%), +0.35% at $7.19
• SharpLink Gaming (SBET): closed at $6.55 (+0.92%), +2.90% at $6.74
• Upexi (UPXI): closed at $0.61 (+7.61%)
• Lite Strategy (LITS): closed at $1.11 (+3.74%)

ETF Flows

Spot BTC ETFs

• Daily net flows: $257.7 million
• Cumulative net flows: $54.05 billion
• Total BTC holdings ~1.26 million

Spot ETH ETFs

• Daily net flows: $9.2 million
• Cumulative net flows: $11.51 billion
• Total ETH holdings ~5.64 million

Source: Farside Investors

While You Were Sleeping

XRP falls again under $1.4. When will the downtrend end?

Ripple (XRP) Price Predictions: Analysis

Key support levels: $1

Key resistance levels: $1.4

XRP’s Downtrend Continues

XRP made a brief attempt to hold the support at $1.4, but sellers returned and pushed the price lower, which turned this level into a key resistance. Hopefully, buyers will show up soon to reverse this trend before it is too late.

Sellers Dominate

Since the start of the year, XRP has closed 6 of 7 weekly candles in the red. That is extremely bearish and left no space for a relief rally. Considering how aggressive this selloff is, a future bounce will likely be just as significant and sharp.

Daily MACD is Bullish

Even if the price action remains bearish, the MACD momentum indicator on the daily timeframe is bullish with a positive histogram. As long as this holds, XRP may be forming a complex reversal pattern that could see it attempt to move higher soon.

Watch closely the level at $1.4. If reclaimed again, bulls may be returning.

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Nvidia shares surged in after-hours trading Wednesday after the company reported another strong earnings beat driven by relentless demand for artificial intelligence chips. 

The stock briefly crossed the $200 mark before pulling back, reflecting both investor optimism and profit-taking following the announcement.

Nvidia Earnings Beat All Wall Street Forecasts

The company reported quarterly revenue of $68.1 billion, up sharply from a year earlier and above Wall Street expectations. Adjusted earnings per share came in at $1.62, also beating forecasts.

The results reinforced Nvidia’s dominant position as the primary supplier of AI computing hardware powering cloud providers, startups, and enterprise AI deployments.

However, the stock reaction showed mixed sentiment. Nvidia initially jumped after the report, pushing past $200 in after-hours trading. 

Yet gains faded quickly, and the stock dropped back toward the mid-$190 range as traders locked in profits and reassessed future growth expectations.

Investors focused heavily on Nvidia’s outlook. The company projected around $78 billion in revenue for the next quarter, exceeding analyst estimates. 

This suggested that AI infrastructure spending remains strong, despite recent concerns about slowing demand or overspending in the sector.

Meanwhile, Nvidia’s data center business continued to drive most of its growth. Cloud companies and governments are racing to build AI infrastructure, and Nvidia’s chips remain central to that expansion. 

CEO Jensen Huang said customers are investing aggressively in AI compute to support future services and automation.

Still, the pullback after the initial surge highlights investor caution. Nvidia has already delivered massive gains over the past two years, and expectations remain extremely high. 

Even strong results can trigger volatility if traders were positioned for larger surprises.

Ultimately, the earnings report confirmed one key point: AI spending remains strong, and Nvidia continues to capture the bulk of that demand. 

Phemex launches AI Bot in Feb 2026, automating grid strategies for 10m users under its AI-native initiative.

Cryptocurrency exchange Phemex announced the launch of its AI Bot trading system, according to a company statement released Thursday, marking a development in the platform’s transition to an AI-integrated exchange model.

The trading bot represents a deployment of artificial intelligence technology for the exchange’s 10 million users globally, the company stated. The system automates quantitative trading strategies across Futures Grid, Spot Grid, and Martingale trading systems.

Earlier in 2024, Phemex announced an AI-Native Initiative aimed at integrating artificial intelligence across its operations and product infrastructure, according to the company. The AI Bot launch serves as an implementation of that strategy, moving from planning into operational deployment.

The trading system utilizes machine learning to analyze data points in real-time and automates trading strategies, according to the company. The bot includes risk management features that adjust leverage and parameters based on historical volatility data, Phemex stated.

The company has initiated an “AI Bot Carnival” promotional program featuring a loss protection program for new users, along with volume-based rewards and incentives for users operating multiple bots, according to the announcement.

“Phemex AI Bot is solid proof that our AI-Native strategy is not theoretical — it is operational,” stated Federico Variola, CEO of Phemex. “We are not experimenting with AI at the margins. We are actively building an exchange where intelligent systems are embedded into how products function.”

Phemex was founded in 2019 and operates as a cryptocurrency exchange offering spot and derivatives trading, copy trading, and wealth management products, according to company information. The platform serves over 10 million traders worldwide.

The dispute between Aave Labs and the Aave DAO appears to be escalating, with DAO delegates ramping up their hostility after Labs’ “Aave Will Win” proposal requested another $51 million in development funding from the DAO.

On Feb 20, delegate BGD Labs announced its intent to halt its work with the DAO due to Labs’ focus on Aave V4 rather than “a very mature and successful V3.” The decision came after Aave Labs co-founder Stani Kulechov stated in the proposal that “Once V4 is mature, V3 parameters should be gradually adjusted to encourage migration, following the same approach used in past version transitions.”

Marc Zeller, the founder of Aave-Chan Initiative (ACI), another service provider to the Aave DAO, called BGD’s impending departure from the DAO a major change and sold a portion of his AAVE holdings.

Today, the feud between the DAO and Labs was cranked up a notch after Zeller published a full audit of Labs’ performance in the Aave governance forum, bashing Aave Labs’ product delivery, profitability, and business development (BD).

Zeller referred to Labs’ standalone products, including Lens Protocol, GHO v1, and Horizon, as “The Product Graveyard,” citing “zero successes.” He went on to point out that even its more successful launches, such as Horizon, which has commanded over $500 million in total value locked (TVL), still resulted in a negative 96% return on investment (ROI), and that Aave’s stablecoin, GHO v1, depegged and had to be rebuilt by BGD and TokenLogic.

The report went on to criticize Aave Labs’ BD department, noting that Labs was set to work with prominent entities in DeFi and traditional finance like Coinbase’s Layer 2 Base, World Liberty Financial, Apollo, and Mantle.

Morpho emerged as the most notable competitor in these relationships and now serves as the backend of Coinbase’s decentralized lending product, and recently announced a partnership with $800 billion asset manager Apollo Global Management.

While the relationship between the DAO and Labs continues to crack, Aave remains DeFi’s leading protocol by TVL, accounting for more than 28% of the DeFi market with $27.5 billion across all chains.

Meanwhile, Morpho is the second largest lending protocol and sixth largest in DeFi with $5.8 billion.

Despite Aave’s leading position in terms of TVL and brand recognition, its native AAVE token is trading near multi-year lows at just $122, or a $1.9 billion fully diluted valuation, after reaching as high as $380 in December 2024 and $660 in 2021.

Aave Labs did not respond to The Defiant’s request for comment.