Crypto World
Step-by-Step Guide: How to Build an AI Crypto Trading Bot for Maximum Profitability
The cryptocurrency market is evolving unprecedentedly, and traders increasingly turn to AI-powered trading bots to maximise their profits and maintain a competitive edge. Building your own AI crypto trading bot can seem daunting, but with the right strategy, tools, and approach, it becomes achievable for traders at all levels. This step-by-step guide will walk you through creating an AI crypto trading bot tailored for maximum profitability, ensuring you stay ahead in the dynamic world of cryptocurrency trading.
Why Build an AI Crypto Trading Bot?
Before diving into the creation process, it’s essential to understand why AI crypto trading bots are gaining so much traction:
-
Speed and Precision:
Bots can analyse data and execute trades in milliseconds, capitalising on fleeting opportunities.
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Emotion-Free Trading:
AI operates based on algorithms and data, eliminating human emotions like fear and greed.
-
24/7 Market Monitoring:
Unlike humans, bots can monitor the market continuously, ensuring no profitable trade is missed.
-
Scalability:
AI bots can handle multiple trading accounts and portfolios simultaneously, providing significant scalability for traders.
-
Customisable Strategies:
With AI, you can tailor strategies to match your trading goals, risk tolerance, and market conditions.
Now that you know the benefits, let’s break down the steps to build your AI-powered crypto trading bot.
Step 1: Choose the Right Programming Language
The foundation of any AI bot is its programming language. Python is the most popular choice for building AI trading bots due to its simplicity, versatility, and extensive library support. Key Python libraries for AI and data analysis include:
-
Pandas and NumPy:
For data manipulation and analysis.
-
TensorFlow and PyTorch
: For machine learning model development.
-
Scikit-learn:
For implementing various AI algorithms.
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Matplotlib:
For visualising trading data.
While Python is ideal for most developers, other languages like JavaScript and C++ can also be used for specific applications requiring speed or browser-based functionality.
Step 2: Integrate with a Crypto Exchange AP
I
Your bot must connect to a cryptocurrency exchange to access real-time data and execute trades. Most exchanges like Binance, Kraken, and Coinbase provide APIs (Application Programming Interfaces) for developers.
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Sign Up:
Choose a reliable exchange and create an account.
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API Keys:
Obtain secure API keys (public and private) from the exchange to allow your bot to interact with the trading platform.
-
Understand API Limits:
Familiarize yourself with rate limits, data access permissions, and security protocols to avoid disruptions.
At this stage, you’ll program your bot to fetch real-time market data (e.g., price, volume, and order book) and send trade orders securely to the exchange.
Step 3: Collect and Prepare Market Data
AI-powered bots rely heavily on historical and real-time market data to make informed trading decisions. The types of data you’ll need include:
-
Historical Price Data:
Open, high, low, and close (OHLC) data for analysing trends.
-
Order Book Data:
To assess liquidity and market depth.
-
News Sentiment:
Use Natural Language Processing (NLP) to analyse news articles, social media posts, and market sentiment.
Ensure your bot has a robust data pipeline to efficiently collect, clean, and preprocess data. Libraries like Pandas can help with data organisation and preparation.
Step 4: Develop the AI Model
The AI model is the brain behind your trading bot. This step involves building machine learning algorithms to predict market movements and generate actionable trading signals.
Popular AI Techniques for Crypto Trading Bots:
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Time-Series Analysis:
Use models like LSTMs (Long Short-Term Memory) to predict future prices based on historical data.
-
Sentiment Analysis:
NLP tools like BERT can extract sentiment from social media and news, helping bots gauge market sentiment.
-
Reinforcement Learning:
This allows bots to learn from past trades and adapt strategies based on success or failure.
For beginners, start with simpler models like logistic regression or decision trees, then gradually implement deep learning for more complex predictions.
Step 5: Define a Real-Time Decision-Making Framework
Your bot needs to analyse market data in real time and make decisions instantly. The real-time decision-making framework should include the following:
-
Signal Generation
: Identify entry and exit points for trades based on AI predictions.
-
Order Execution:
Use the exchange API to place buy and sell orders.
-
Risk Management:
Set stop-loss and take-profit levels to minimise potential losses.
To achieve real-time responsiveness, use WebSocket connections to stream live market data directly into your bot, ensuring it always operates with up-to-date information.
Step 6: Test Your AI Trading Bot
Before deploying your bot, it’s crucial to test its performance using historical and live market data.
-
Backtesting:
Simulate trades using historical data to evaluate the bot’s performance. Tools like Backtrader or Zipline can help with this.
-
Paper Trading:
Test the bot in live market conditions without risking actual capital.
-
Performance Metrics:
Evaluate key metrics like:
-
Win rate
-
Average return per trade
-
Drawdown
-
Sharpe ratio
Refine your AI model and trading strategies based on the test results to ensure optimal performance.
Step 7: Deploy the Bot for Live Trading
Once testing is complete and the bot is performing well, deploy it for live trading:
-
Cloud Deployment:
Use cloud platforms like AWS, Google Cloud, or Azure for seamless and scalable deployment.
-
Security Measures:
Implement strong encryption, API key protection, and two-factor authentication to safeguard against cyber threats.
-
Monitoring:
Set up real-time dashboards using tools like Grafana to monitor the bot’s performance and market behaviour.
Continue to track and refine your bot as it trades in live market conditions to optimize profitability.
Key Considerations Before Deploying an AI Crypto Trading Bot
-
Market Volatility:
Cryptocurrencies are highly volatile. Ensure your bot adapts to sudden price swings and has effective stop-loss mechanisms.
-
Regulatory Compliance:
Stay updated on crypto trading regulations in your jurisdiction to avoid legal issues.
-
Risk Management:
Implement robust risk parameters to protect your capital from market downturns.
-
Security:
Regularly update your bot to address vulnerabilities and prevent unauthorized access.
Conclusion: Start Building Your AI Crypto Trading Bot Today
Building an AI-powered crypto trading bot is no longer reserved for expert developers. With the right tools, programming knowledge, and step-by-step guidance, anyone can create a bot that automates trades, maximizes profitability, and gives a competitive edge in the dynamic crypto market.
While the process requires dedication and continuous refinement, the rewards of having a bot that works tirelessly on your behalf are well worth the effort. Whether you’re a retail trader or an institutional investor, now is the perfect time to leverage AI technology and take your trading strategy to the next level.
TLDR
- CME Group is exploring the creation of its own cryptocurrency, according to CEO Terry Duffy.
- The company is considering launching a proprietary coin that could operate on a decentralized network.
- CME Group is working on a tokenized cash solution with Google, set to release later this year.
- The potential CME Coin could be used by industry participants, though its specific role remains unclear.
- CME Group plans to expand its crypto futures offerings, including 24/7 trading and new contracts for Cardano, Chainlink, and Stellar.
CME Group, a leading player in global derivatives, is exploring the potential launch of its own cryptocurrency. CEO Terry Duffy confirmed the company is considering the creation of a proprietary token. During the company’s latest earnings call, he revealed that CME Group is evaluating initiatives involving its own coin, which could be launched on a decentralized network.
CME Group’s Exploration of a Proprietary Coin
CME Group’s CEO Terry Duffy disclosed during the recent earnings call that the company is reviewing various tokenization options. He noted that CME Group could potentially introduce a token of its own. This would allow it to create a proprietary coin that could run on decentralized networks. Duffy’s comments suggest that the derivatives exchange is carefully analyzing the role of tokens in its operations, including how they could be used as collateral for margin requirements.
The idea of creating its own coin comes as CME Group has expanded its involvement in the cryptocurrency market. The company is already involved in the launch of tokenized cash, a project in partnership with Google. This solution, set for release later this year, will involve a depository bank to facilitate transactions. However, Duffy’s remarks about the CME Coin suggest that the company could venture further into decentralized finance with its own digital asset.
CME Group’s tokenized cash solution, being developed alongside Google, represents a step forward in digital financial services. However, the CME Coin, which Duffy referred to, could mark a larger leap into the decentralized world. Duffy indicated that the CME Coin would serve as a potential tool for industry participants to use, though he stopped short of defining its exact function. Whether the coin would be a stablecoin, settlement token, or a different type of asset remains unclear, as CME Group has not offered further clarification.
CME Group’s exploration of tokenized assets comes as the company continues to expand its crypto futures offerings. The company has seen significant growth in cryptocurrency trading, with average daily volumes hitting $12 billion last year. As part of its strategy, CME Group is set to launch 24/7 trading for crypto futures in the second quarter. It is also adding new cryptocurrency futures contracts for assets like Cardano, Chainlink, and Stellar.
Wall Street’s Growing Interest in Tokenization
CME Group’s potential move to create a proprietary cryptocurrency would place it among the growing number of Wall Street giants exploring tokenized assets. JPMorgan recently introduced JPM Coin, a token used for tokenized deposits on Coinbase’s layer-2 blockchain Base. This move, like CME Group’s exploration of its own coin, is reshaping how traditional financial institutions interact with digital currencies.
Despite the growing interest in tokenization, CME Group has not yet provided details on the timeline or specific goals for its coin. The company’s focus on exploring a proprietary digital asset demonstrates its increasing commitment to cryptocurrency and blockchain technology.
The stablecoin protocol ended its “Frontier” rewards phase with a dollar-denominated token airdrop.
Bitcoin’s (BTC) struggle to hold above $70,000 carried on into Wednesday, raising concerns that the a drop into the $60,000 range could be the next stop. The sell-off was accompanied by futures market liquidations, a $55 billion drop in BTC open interest (OI) over the past 30 days, and rising Bitcoin inflows to exchanges.
The price weakness has analysts debating whether crypto-specific factors or larger macro-economic issues are the driving factor behind the sell-off and what it may mean for BTC’s short-term future.
Key takeaways:
-
Around 744,000 BTC in open interest exited major exchanges in 30 days, equal to roughly $55 billion at current prices.
-
BTC futures cumulative volume delta (CVD) fell by $40 billion over the past 6-months.
-
Crypto exchange reserves have risen by 34,000 BTC since mid-January, increasing the near-term supply risk.
BTC open interest collapse points to large-scale deleveraging
CryptoQuant data noted that Bitcoin’s 30-day open interest change shows a sharp contraction across exchanges, reflecting widespread position closures, not just freshly opened short positions.
On Binance, the net open interest fell by 276,869 BTC over the past month. Bybit recorded the largest decline at 330,828 BTC, while OKX saw a reduction of 136,732 BTC on Tuesday.
In total, roughly 744,000 BTC worth of open positions were closed, equivalent to more than $55 billion at current prices. This drop in open positions coincided with Bitcoin’s drop below $75,000, indicating deleveraging as a driving factor, not just spot selling.
Onchain analyst Boris highlighted that the cumulative volume delta (CVD) data shows market sell orders continue to dominate, particularly on Binance, where derivatives CVD sits near -$38 billion over the past six months.
Other exchanges show varying dynamics: Bybit’s CVD flattened near $100 million after a sharp December liquidation wave, while HTX stabilized at -$200 million in CVD as the price consolidates near $74,000.
Related: Bitcoin bounces to $76K, but onchain and technical data signal deeper downside
Increased exchange flows add pressure as analysts watch key levels
Meanwhile, Bitcoin inflows to exchanges surged in January, totaling roughly 756,000 BTC, led by Binance and Coinbase. Since early February, inflows have exceeded 137,000 BTC, underscoring traders’ repositioning and not necessarily leaving the market.
On the supply side, analyst Axel Adler Jr. noted that exchange reserves have risen from 2.718 million BTC to 2.752 million BTC since Jan. 19. The analyst warned that continued growth above 2.76 million BTC could increase selling pressure. The analyst believed that a complete capitulation is yet to take place, which may happen at lower price levels.
Market analyst Scient said Bitcoin is unlikely to form a bottom in a single day or week. Durable market bottoms may develop through two to three months of consolidation near the major support zones, with higher time frame indicators. Scient noted that whether this structure forms in the high $60,000 range or the low $50,000 level remains unclear.
Bitcoin Trader Mark Cullen continues to see potential downside toward $50,000 in a broader macro scenario, but expects a short-term reversion toward the local point of control ($89,000 to $86,000) after BTC swept weekly lows below $74,000 on Tuesday.
Related: Bitcoin’s $68K trend line seen as potential BTC price floor: Traders
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
The digital asset treasury (DAT) movement is drowning, with nearly every DAT underwater.
The Tuesday purchases followed a heavier round of acquisitions on Monday, during which Ark Invest loaded up on crypto-related shares worth more than $71 million.
The broader digital asset market is in a bearish state, but some experts are leveraging the dip to expand their crypto exposure. Cathie Wood’s investment management company, Ark Invest, is one of them, having scooped up thousands of shares linked to crypto firms over the last few trading days.
According to the latest trade filing from Ark Invest, the firm spent over $19 million to purchase additional crypto-related stocks through its exchange-traded funds (ETFs) on February 3. The acquired shares are tied to multiple companies, including the stablecoin issuer Circle, crypto exchanges Coinbase and Bullish, and Ethereum treasury firm Bitmine.
Ark Invest Buys Crypto Stocks
On Tuesday, Ark Invest bought 145,488 Bitmine shares for $3.25 million and 125,218 Bullish shares for $3.46 million. In addition, the company purchased 42,878 Circle shares for $2.4 million and 3,510 Coinbase shares for $630,606. Notably, Ark Invest also tapped into the Bitcoin-focused tech entity Block Inc. and financial services firm Robinhood, buying shares totaling 31,202 and 89,677 for $1.77 million and $7.8 million, respectively.
The Tuesday purchases followed a heavier round of acquisitions on Monday. Ark Invest had scooped up crypto-related shares worth more than $71 million.
Similarly, the Monday buys included shares of Coinbase, Circle, Bitmine, Robinhood, Bullish, and Block Inc. The firm made these purchases through several ETFs, including ARK Blockchain & Fintech Innovation ETF (ARKF) and ARK Innovation ETF (ARKK).
Market Crashes as BTC Declines
Ever since bitcoin (BTC) began its descent late last year, crypto stocks have followed suit. Data from Trading View shows that the stocks of most crypto-related companies are down by double digits over the last three months. Their decline has intensified as BTC remains below $90,000 and faces the risk of plummeting under $60,000. At the time of writing, the leading digital asset was changing hands at $76,000, down 17% monthly and 14% weekly.
While BTC and the broader market continue to decline, Ark Invest has been on a buying spree. The asset manager has spent millions of dollars on crypto-related stocks in December and January. From the look of things, the company is likely to continue buying crypto stocks for as long as the bearish season lasts.
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TLDR
- Fidelity Digital Assets has officially launched the FIDD stablecoin with an initial supply of over 59 million dollars.
- The FIDD stablecoin is now live on the Ethereum blockchain and is available for on-chain payments and institutional settlements.
- Fidelity confirmed that FIDD is fully backed by US dollars held in accredited banks and complies with the GENIUS Act.
- Mike O’Reilly stated that Fidelity is committed to stablecoin development and has researched the digital asset space for years.
- The FIDD token will be available through Fidelity Digital Assets, Fidelity Crypto, and other institutional platforms.
Fidelity Digital Assets has officially launched its native stablecoin FIDD on the Ethereum blockchain, following a recent announcement. The asset began with an initial issuance of over $59 million and is now live for transactions. The token is fully backed by US dollars held in accredited financial institutions.
FIDD Stablecoin Launches with Initial Supply and Ethereum Integration
Fidelity introduced the FIDD stablecoin as part of its broader expansion into the blockchain and digital payments market. The company minted the token on Ethereum, aligning with the industry’s move toward on-chain settlement. The initial supply exceeds $59 million but remains largely limited in wallet distribution.
Mike O’Reilly, President of Fidelity Digital Assets, emphasized the company’s dedication to digital innovation. “We have spent years researching and advocating for the benefits of stablecoins,” he said. The token aims to serve as both a payment method and a settlement tool for institutional clients.
The FIDD stablecoin complies with the regulatory framework set by the GENIUS Act, allowing for secure and compliant issuance. It is backed by US dollar reserves stored in regulated banks. The GENIUS Act also permits backing by US Treasury bills, enhancing issuer control over earnings.
Utility, Custody, and Institutional Access
Fidelity has confirmed that FIDD will be available across its platforms, including Fidelity Crypto and Fidelity Crypto for Wealth Managers. Purchase and redemption will be handled internally, while external trading will occur through major cryptocurrency exchanges. The asset is fully transferable within Ethereum-based wallets.
The company will also offer custodian services for holding FIDD and managing associated reserves. This includes both direct and institutional client servicing. As Fidelity already operates digital asset custody, it expands its offerings by adding a compliant stablecoin.
FIDD is designed for on-chain payments and institutional use cases, especially for settlement across digital asset platforms. Its compatibility with Ethereum ensures wide infrastructure support. Despite the launch, liquidity and adoption are expected to build gradually.
Stablecoin Ecosystem Sees New Entrants with FIDD in Focus
The FIDD stablecoin enters a market dominated by USDT and USDC, both of which have seen growth over the past year. New regulations like the GENIUS Act have encouraged more issuers to develop compliant tokens. FIDD is Fidelity’s answer to the emerging demand for tokenized dollars with regulatory clarity.
Fidelity joins the list of fintechs and banks offering branded stablecoins, focusing on secure reserves and usage controls. However, like many new stablecoins, FIDD must still prove its real-world utility and demand. Several newly launched stablecoins have remained underutilized due to limited liquidity or application.
The Fidelity Digital Interest Token, launched in September 2025, demonstrates the firm’s ongoing blockchain efforts. That token reached over $264 million in total value before dropping due to redemptions. Its current assets under management stand at approximately $161 million.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
KT DeFi launches regulated cloud mining, offering low-entry, transparent access to BTC, XRP, ETH, SOL, and DOGE.
Summary
- Global crypto mining shifts to renewable energy as KT DeFi offers sustainable, low-cost cloud mining access.
- KT DeFi supports BTC, XRP, DOGE, SOL, and ETH, enabling steady mining returns without active trading.
- As miners adopt solar and wind power, KT DeFi positions cloud mining as a stable, eco-friendly income option.
In today’s rapidly evolving crypto landscape, a quiet but powerful transformation is taking place — one driven by energy efficiency and sustainability.
Across the globe, large-scale mining operations are moving away from traditional high-energy mining models and adopting renewable energy sources such as solar and wind power. This shift not only significantly reduces operating costs, but also improves long-term stability while aligning mining profitability with environmental responsibility.
For investors, this represents more than an environmental upgrade; it marks a smarter and more sustainable way to participate in crypto mining.
Why cloud mining is gaining momentum
As market volatility increases and mining technology becomes more complex, many investors are reconsidering how they participate in crypto mining.
Instead of purchasing hardware, managing electricity costs, and handling technical maintenance, more users are turning to cloud mining — a simpler and more efficient alternative.
With cloud mining:
- Hardware deployment and maintenance are handled by professional teams
- Energy management and system optimization are centralized
- Users simply select a mining contract
- Mining rewards are calculated and distributed daily
- No technical knowledge or active trading is required
This makes cloud mining an ideal entry point for beginners and a time-efficient solution for long-term investors.
KT DeFi: A beginner-friendly and transparent cloud mining platform
KT DeFi is a regulated cloud mining platform designed to make crypto mining accessible, transparent, and sustainable.
The platform supports multiple major cryptocurrencies, including BTC, XRP, DOGE, SOL, ETH, and more. With a clear interface and straightforward contract structure, users can participate in mining with a low entry threshold and predictable returns.
For investors who prefer steady income over short-term speculation, KT DeFi offers a clear alternative:
No market timing, no frequent trading — just consistent, automated mining rewards.
Why choose KT DeFi
- Beginner-friendly design – Simple setup, intuitive interface, no technical background required
- Global mining infrastructure – Hundreds of mining facilities and over one million devices worldwide
- 100% renewable energy mining – Powered by solar and wind energy for long-term sustainability
- Stable passive income model – Mining runs automatically once a contract is activated
- Strong security standards – Multi-layer protection and transparent platform operations
This model has attracted over 9 million users globally, reflecting strong trust and long-term adoption.
Key platform benefits
- $17 instant signup bonus for new users
- No hidden service or management fees
- Multi-currency settlement: XRP, SOL, DOGE, BTC, LTC, ETH, USDC, USDT, BCH
- Affiliate program with referral rewards of up to $50,000
- Protected by McAfee® Security and Cloudflare®
- 100% uptime guarantee
- 24/7 live customer and technical support
How to start mining with KT DeFi
Step 1: Create an account
Register using an email address and gain immediate access to cloud mining services. New users can start mining Bitcoin and other cryptocurrencies right away.
Step 2: Choose a mining contract
| Contract Name | Asset Type | Investment (USD) | Duration | Expected Return (Principal + Profit) |
| BTC Welcome Plan | BTC | $100 | 2 Days | $108 |
| Goldshell Mini DOGE Pro | DOGE / LTC | $500 | 6 Days | $539.6 |
| Bitmain Antminer L7 | DOGE / LTC | $5,000 | 20 Days | $6,500 |
| Antminer S19k Pro | BTC | $10,000 | 30 Days | $14,830 |
| ANTSPACE HK3 | BTC / BCH | $50,000 | 35 Days | $80,625 |
Mining rewards begin the day after contract activation
Once total earnings reach $100, users may withdraw or reinvest
About KT DeFi
Founded in 2019, KT DeFi is a UK-registered and licensed cloud mining platform dedicated to making cryptocurrency mining more accessible, efficient, and sustainable.
By leveraging advanced mining hardware, intelligent hash rate allocation, and renewable energy infrastructure, KT DeFi lowers the barriers to entry for crypto mining, allowing users of all experience levels to participate with confidence.
KT DeFi believes that long-term value comes from stability, transparency, and sustainable returns, not short-term speculation. Through continuous system optimization and strict security standards, the platform aims to help users achieve steady asset growth in a reliable environment.
For investors seeking consistent passive income in the crypto space, KT DeFi is built to be a trusted long-term partner.
For more information, visit the official website, or download the mobile app.
Email: [email protected]
Disclosure: This content is provided by a third party. Neither crypto.news nor the author of this article endorses any product mentioned on this page. Users should conduct their own research before taking any action related to the company.
Bitcoin signage in Times Square in New York, US, on Tuesday, Dec. 9, 2025.
Michael Nagle | Bloomberg | Getty Images
Bitcoin nearly touched the $72,000 mark on Wednesday, marking the second straight day of its massive retreat this week.
The world’s oldest cryptocurrency sank as low as $72,096.20, plunging more than 5% on the day. It was last trading at $72,958.38, down about 4% on the day. Bitcoin is currently more than 40% off its record high of about $126,000 hit last October.
Bitcoin in the past day, per Coin Metrics
Bitcoin first broke below the $73,000 mark on Tuesday, hitting its lowest price in roughly 16 months and approaching its pre-election value. Analysts say $70,000 is a key level to watch as the digital asset’s downturn deepens, according to a Citi note to clients dated Tuesday.
The token’s value is bleeding as a result of several of geopolitical and economic challenges, among other headwinds.
Chief among them is investors’ recent rotation out of risk-on assets due to rising tensions between the U.S. and Europe over U.S. President Donald Trump‘s Greenland gambit and a recently ended partial government shutdown that delayed the release of some critical economic data. Also at play are expectations of a U.S. monetary policy shift following Trump’s nomination of Kevin Warsh for Fed chair late last month as well as a slowdown in efforts to create more crypto-friendly regulatory and legislative guardrails in the U.S.
Large institutional outflows driven by expectations of a deeper bitcoin correction has also thinned liquidity for the token, hurting its price, according to a recent analyst note from Deutsche Bank.
Spot bitcoin exchange-traded funds have seen significant outflows since a series of liquidations of highly leveraged digital asset positions last October, the analysts noted. The funds have recorded outflows of more than $3 billion in January, roughly $2 billion last December, and about $7 billion last November.
Bitcoin’s pullback hit several crypto stocks. Strategy, a bitcoin treasury firm, was also down 5% on the day, while digital asset mining names like Riot Platforms and MARA Holdings shed almost 11%.
Stellar (XLM) has fallen below $0.20. This move has erased all of the recovery it achieved last year. However, several positive signals suggest that many investors are still staying within the ecosystem.
In addition, real-world assets (RWA) and stablecoins could become key drivers of further XLM accumulation.
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Positive Signs for Stellar (XLM) Despite the Sharp Price Drop
Data from DefiLlama shows that the amount of XLM locked in DeFi protocols on the Stellar network reached a new all-time high in early February 2026. It surpassed 900 million XLM.
This milestone reflects the growth of Stellar’s DeFi ecosystem. It comes even as XLM continues to fall below the year’s key support level at $0.20.
Although Stellar’s TVL, measured in USD, currently sits around $163 million, the sharp rise in locked XLM underscores strong confidence from the community and long-term investors in the network’s adoption potential.
The main protocols driving this capital inflow include Blend, a liquidity protocol that allows anyone to create flexible lending markets on Stellar, and Aquarius Stellar, an AMM protocol and liquidity management layer for the network. Together, these two protocols account for nearly 70% of total TVL.
Artemis data also reveals another notable signal. Weekly active users across the Stellar ecosystem have remained steady at around 60,000 over the past few weeks. No significant decline has appeared despite the deep XLM price dump.
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The chart indicates that in late 2024, when XLM fell below $0.10 before rising to $0.60, user activity remained stable and even trended upwards.
This suggests that Stellar users are not abandoning the network, even as capital continues to exit the broader crypto market. However, the current lack of new users may explain why XLM has not yet recovered.
Derivatives metrics also indicate that XLM could be entering a new consolidation zone. Open Interest volume has dropped to its lowest level since November 2024. This decline reflects a sharp reduction in leveraged exposure among traders.
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As a result, strong volatility may be fading. XLM could now be moving into a sideways phase, with less leveraged buying and selling pressure. This environment often allows a new accumulation zone to form.
However, identifying the exact market bottom and timing a recovery remains challenging under current market conditions.
Real-World Assets and Stablecoins Could Be Stellar’s Main Drivers in 2026
A report published last month stated that the total value of tokenized real-world assets on Stellar, excluding stablecoins, reached $1 billion at the start of this year.
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Santiment, a crypto market analytics platform, also reported that Stellar ranks among the top four RWA projects by GitHub development activity since the beginning of the year.
“XLM isn’t a speculative add-on. It’s required for transactions, account operations, and network activity. As RWA volumes grow, usage of $XLM scales with it — not cyclically, but fundamentally,” said Scopuly, a Stellar wallet provider.
Stellar’s stablecoin market cap remains relatively modest at around $200 million. However, MoneyGram, one of the world’s leading companies in international remittance services and P2P payments, recently reaffirmed the stability of its USD-backed stablecoin instrument. The firm continues testing it on Stellar.
Therefore, demand for RWAs and stablecoins could become the primary drivers of XLM accumulation, especially as the token faces strong selling pressure near current lows.
Bitcoin fell sharply to $73,000 on February 3, extending a broader bearish trend that has now erased 41% from its October 2025 all-time high above $126,000. The drawdown has intensified debate over whether the market is approaching a cyclical bottom—or entering a deeper corrective phase.
The sell-off mirrors rising anxiety across traditional markets. US equity indices weakened amid concerns about artificial intelligence-driven disruption and escalating geopolitical risks, prompting investors to rotate away from risk assets.
In that environment, capital flowed back into traditional safe havens such as gold and silver, while Bitcoin failed to attract defensive demand.
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Macro and Geopolitical Stress Push Investors Toward Traditional Havens
Bitcoin’s volatility continues to reflect macro sensitivity rather than isolation from global markets. The latest leg down coincided with renewed tensions between the United States and Iran after an Iranian drone was reportedly shot down near a US aircraft carrier.
The incident pushed the VIX up roughly 10% and drove the Crypto Fear & Greed Index into “extreme fear” territory.
At the same time, developments in artificial intelligence—including new announcements around Anthropic’s Claude chatbot—sparked renewed concerns about disruption across the tech sector.
That uncertainty weighed on major technology stocks and further reduced appetite for speculative assets.
While Bitcoin declined, gold rose 6.8% and silver gained 10%, reinforcing their role as preferred hedges during periods of monetary and geopolitical stress.
Speaking to CNN, Gerry O’Shea, Global Head of Market Insights at Hashdex, noted that the divergence between Bitcoin and gold suggests investors still view precious metals as the primary safe haven during periods of uncertainty.
That shift has weakened Bitcoin’s short-term refuge narrative and added downside pressure.
Analysts Warn of Deeper Drawdowns and a Potential Bull Trap
Market participants remain divided, but several analysts are openly warning that the correction may not be over.
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Crypto analyst Benjamin Cowen argued that Bitcoin’s near-term path is critical:
Other analysts are more pessimistic. Nehal, a widely followed trader on X, suggested the current structure resembles a classic bull trap, warning that the move lower may only be halfway complete.
According to Nehal’s historical comparison, Bitcoin’s previous cycles ended with drawdowns of 86% in 2018 and 78% in 2021.
Applying a similar framework to the current cycle implies a potential 72% decline, which would place Bitcoin near $35,000.
This cyclical perspective remains influential despite structural changes in the market, including ETF adoption and greater institutional participation.
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On-Chain Data Signals “Bottom Discovery” Phase
On-chain indicators are adding another layer to the debate. Analyst CryptOpus noted that Bitcoin has entered what he describes as a “bottom discovery” phase for the first time this cycle.
At the 2025 peak, roughly 19.8 million BTC were held in profit. That figure has now dropped to 11.1 million BTC, a 40% reduction in profitable supply.
Historically, similar conditions have marked transitions from corrective phases toward cycle resets. In 2018, Bitcoin remained in this state for roughly eight months before stabilizing.
Key Technical Levels Under Scrutiny
From a technical standpoint, downside risks remain clearly defined. Nic, CEO of Coin Bureau, highlighted that Bitcoin has remained under pressure since breaking below the 50-week moving average in November.
Bitcoin is currently trading near MicroStrategy’s cost basis and close to the April lows around $74,400.
“If we break lower, the next major level is $70,000, just above the previous all-time high of $69,000. A clean break below that opens the door to a bear market target in the $55,700–$58,200 range, between realized price and the 200-week moving average,” Nic warned.
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Conflicting Views on Whether a Bottom Is Near
Not all analysts agree with the bearish outlook. Michaël van de Poppe believes Bitcoin may already be nearing the end of its downturn.
Meanwhile, analyst David Battaglia focused on liquidation dynamics, describing current conditions as increasingly irrational.
Battaglia noted that below $85,000, liquidity gaps were significant, meaning panic sellers—whether institutional or whales—likely exited at suboptimal prices.
He contrasted this with the October 10 crash tied to Binance, which he described as structurally cleaner.
“Between $90,000 and $100,000, there’s massive short density and a 14:1 puts-to-calls imbalance, which under normal conditions already signals a strong bottom,” Battaglia said.
In Summary
Bitcoin’s drop to $73,000 has reignited fears of a deeper correction. Macro uncertainty, geopolitical tension, and mixed on-chain signals leave the market split between expectations of further downside and signs of an emerging bottom.
The coming weeks will likely determine whether this move represents a temporary pause—or the foundation of a new trend for 2026.
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