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Bitcoin & Ethereum Drop, ETFs Face Losses Amid Market Volatility

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21Shares Introduces JitoSOL ETP to Offer Staking Rewards via Solana

TLDR:

  • Bitcoin and Ethereum fall below key technical levels, triggering $1.7B in liquidations. 
  • U.S. Treasury confirms it cannot “bail out” Bitcoin or direct banks to increase holdings. 
  • Spot ETFs face unrealized losses, but most investor positions remain largely intact. 
  • Crypto funding continues selectively with TRM Labs, Flying Tulip, and Prometheum rounds.

 

Recent analysis covers major shifts in digital assets, including sharp price drops, regulatory actions, and institutional responses affecting market flows and positioning.

Crypto Market Downturn and Institutional Exposure

Bitcoin fell below $65,000, while Ethereum dropped under $1,900, triggering $1.7 billion in liquidations within 24 hours. Most liquidations came from long positions, as leveraged traders exited rapidly across major exchanges.

The market broke key technical levels, with Bitcoin falling under the 50-week moving average. Analysts used historical retracements to estimate downside, with targets ranging from $35,200 to $45,000.

Alex Thorn from Galaxy Digital noted that past cycles showed drops below 50-week moving averages often tested the 200-week level near $58,000.

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Meanwhile, the cost basis for many institutional investors remained above current prices.
Strategy Inc.’s average holding cost is around $76,000 per Bitcoin, while JPMorgan estimates mining costs at $87,000.

Spot Bitcoin ETFs are also under pressure, with average entry costs near $84,100 per coin.
Despite a 25% unrealized loss, only a small portion of ETF assets has been withdrawn.

Overall, the market shows lower liquidity, technical weakness, and elevated institutional stress.

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ETF inflows slowed, and macro-hedging appeal has reduced, reflecting cautious sentiment.

Regulation, Policy Signals, and Capital Movements

Seized Bitcoin has grown in value from $500 million to over $15 billion, reflecting market gains despite volatility. U.S. Treasury Secretary Scott Bessent clarified that seized Bitcoin will be retained, but the government cannot “bail out” prices.  

Regulatory attention is shifting to crypto infrastructure, focusing on exchanges, stablecoin corridors, and liquidity hubs.

The Treasury investigates potential sanction evasion, particularly by platforms linked to Iran’s $8–10 billion annual crypto activity.

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Meanwhile, the White House hosted discussions with Coinbase, banking groups, and industry representatives on stablecoin rewards. The dialogue explored whether third-party platforms can provide regulated yields to users.

At the same time, state-level enforcement increased, with New York, Nevada, and Connecticut issuing warnings or restraining orders. This divergence reflects the evolving balance between federal guidance and state-level actions.

Capital formation continues cautiously. TRM Labs raised $70 million in Series C funding, while Flying Tulip secured $75.5 million. Prometheum and Penguin Securities also completed rounds, albeit at more conservative valuations.

Despite market stress, selective funding demonstrates ongoing investor interest in blockchain and crypto infrastructure projects. Family offices largely remain sidelined, with 89% holding no crypto exposure, while AI investments show higher interest.

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BlackRock’s Bitcoin spot ETF IBIT retains most assets despite AUM retreat from $100 billion to $60 billion. Overall, institutional positioning reflects cautious engagement, regulatory attention, and selective capital deployment.

 

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Crypto World

Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday

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Oil prices jumped more than 3% on Monday, pushing Brent crude above $116 a barrel. West Texas Intermediate (WTI), the US benchmark, climbed to roughly $102 per barrel.

The latest rise comes as the US-Israel war on Iran entered its fifth week with no signs of abating.

Oil Extends Its War-Fueled Rally 

Several escalatory developments over the weekend fueled the surge. President Donald Trump told the Financial Times he could possibly seize Kharg Island, the terminal that handles roughly 90% of Iran’s crude exports.

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The US president struck a mixed tone on diplomacy with Iran, saying he was “pretty sure” of making a deal with Iran but conceding that talks could still collapse.

Meanwhile, Iran’s parliament speaker warned that Tehran would “set them on fire” when American forces arrived and promised consequences for US-allied nations in the region. 

The oil price surge is far from over, according to market analysts, who warn that the prolonged closure of the Strait of Hormuz could drive crude even higher.

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“A scenario in which the Strait remains closed for an additional month would be consistent with oil prices rising towards $150/bbl and constraints on industrial consumers of energy supply,” Bruce Kasman, global head of economics at JPMorgan, said.

According to Bloomberg, US officials and Wall Street analysts have also begun discussing the possibility of crude reaching $200 per barrel.

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Asian Stocks Tumble, Crypto Feels the Pressure

The energy shock rippled across Asia. Google Finance data showed that Japan’s Nikkei 225 fell over 4.5%, while South Korea’s KOSPI dropped more than 4.3% as import-dependent economies repriced risk.

The volatility has spread to crypto markets, with asset prices dipping early in the morning before rebounding. 

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“The market briefly crashed just now — ETH dropped below $1,940 and BTC fell below $65,000,” Lookonchain reported.

Oil above $100 per barrel continues to pressure risk assets by fueling inflation expectations and delaying anticipated Federal Reserve rate cuts.

The post Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday appeared first on BeInCrypto.

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

Lido’s decentralized autonomous organization is considering a one-off $20 million buyback of its governance token to address so-called price dislocation, which is at “historically depressed levels” relative to Ether, according to the DAO. 

The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, currently worth $20 million from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.

“This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.”

A token buyback of this size could boost the price of the token, which has fallen roughly 96% from its all-time high. In November, a Lido DAO member pitched an automated buyback mechanism for LDO to improve the token’s price. However, that proposal hasn’t been implemented.

LDO’s change in price relative to ETH since 2024. Source: Lido DAO

Lido DAO pointed out that LDO is trading at a steep discount to Ether (ETH) at a ratio of 0.00016, roughly 63% below its two-year median.

This is despite the protocol holding the top spot of the Ethereum liquid staking market, with a 23.2% share of staked Ether, according to Dune Analytics data. The protocol’s dominance has even been flagged as a centralization risk to the network in previous years.

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Share of Ethereum network validators. Source: Dune Analytics

Related: Ethereum builders propose ‘economic zone’ to tackle L2 fragmentation 

LDO is currently trading at $0.30, down 95.9% from its $7.30 high set in August 2021, according to CoinGecko data. LDO’s $255 million market cap makes it the 141st largest token by value at the time of writing.

“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO said. 

Lido DAO proposes buying stETH in batches

Lido DAO proposed buying up to 10,000 stETH in smaller batches of 1,000 to buy LDO. 

Lido DAO said it would use limit orders or adopt a dollar-cost averaging strategy to avoid market volatility. 

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