The crypto market experienced a rare period of volatility during Asia hours on Monday, with bitcoin BTC$66,186.44 tumbling more than 5% to $64,270 shortly after midnight UTC before bouncing back to $66,300 by 11:00 UTC.

The selloff and subsequent bounce mirrored the action in U.S. equities. Futures tracking the S&P 500 index fell by 0.84% after opening on Sunday evening before starting to recover five hours later.

Gold futures did the opposite, rising on Sunday evening’s open to the highest since Jan. 30 before giving back some of those gains during European hours. Silver tracked the more expensive metal.

The surge in precious metals alongside weak performance in risk assets comes after U.S. President Donald Trump said he planned to impose new 15% global tariffs on trading partners and increased U.S. military presence near Iran fueled a rush toward haven assets.

Altcoins succumbed to low liquidity conditions overnight as solana (SOL) and SUI$0.9065 tumbled by between 7% and 8% before both bouncing back in European hours, a move that led to $270 million in altcoins liquidations, according to CoinGlass.

Derivatives positioning

• Demand for leveraged products remains tepid, as evidenced by total crypto futures open interest staying below $100 billion for over two weeks.
• Liquidations aren’t helping either. In the past 24 hours, crypto futures bets worth $500 million have been forcibly closed by exchanges due to margin shortages.
• Traders continue to deploy capital in futures linked to tokens associated with traditional assets such as gold. For instance, open interest in Tether gold (XAUT) futures has increased by 14% in 24 hours even as BTC, ETH, SOL, HYPE, DOGE and others continue to see capital outflows.
• ZEC and CRO are the only tokens boasting a 24-hour positive cumulative volume delta (CVD), a sign of buyer dominance. Meanwhile, BTC and other majors have negative CVDs, a sign of selling pressure overpowering buyers.
• Bitcoin’s 30-day implied volatility index, BVIV, has jumped 9% to over 60%, indicating renewed jitters.
• Traders chased bitcoin put options at levels $58,000, $60,000 and $62,000 as Trump’s new tariffs injected fresh uncertainty into the market.
• On Deribit, bitcoin and ether puts traded at a premium to calls across all time frames, indicating lingering downside fears.

Token talk

• The altcoin market remains in the red on Monday after an exaggerated selloff was triggered by weakness in bitcoin and U.S. equities.
• Low liquidity conditions led to pump.fun’s native PUMP token losing 8.5% of its value before staging a bounce, while layer zero (ZRO) began selling off early on Sunday, losing 16.5% over 24 hours before recovering at 04:00 UTC.
• A small number of tokens outperformed the wider market. Restaking token ETHFI rose by more than 10% from Monday morning’s low.
• Telegram-linked toncoin (TON) showed more stability overnight, falling by just 3.6% before bouncing by 4.9%.
• CoinDesk’s DeFi Select Index (DFX) was the best-performing benchmark over the past 24 hours, losing just 1.84% while the CoinDesk Smart Contract Platform Select Index and CoinDesk Computing Select Index lost 3.56% and 3.23%, respectively.
• The altcoin market has largely been tracking bitcoin during February, though with a lack of liquidity that’s led to exaggerated moves. If bitcoin can put in a local low and bounce back above $70,000, for example, several altcoins are primed for extended upside after order books were wiped in early February.

Austria’s financial regulator said it prohibited the European arm of KuCoin from conducting new business and onboarding customers after the crypto exchange lost key compliance staff just months after gaining a Markets in Crypto Assets (MiCA) permit to operate across the European Union.

KuCoin EU no longer has key function holders in anti-money laundering (AML) and prevention of terrorist financing roles, according to a statement from the regulator, the FMA, which granted the license in November. The freeze will last until the firm appoints the necessary compliance reporting staff, it said.

“The effective staffing of these key functions is a prerequisite for the orderly conduct of business,” the FMA said. The exchange is “prohibited with immediate effect from concluding business relationships of any kind with new customers and from concluding new contracts or new products within the scope of existing business relationships until these key functions have been appropriately filled.”

Kucoin said the positions are being filled as part of an expansion of the compliance team in Austria.

“Our priority in Austria is to establish a governance framework that reflects the expectations of European regulators and the responsibility we carry toward the EU market,” said Sabina Liu, managing director of KuCoin EU. “By investing in experienced local compliance professionals, we are reinforcing a compliance-first operating model designed for long-term stability and transparency.”

Austria has become a popular destination for crypto exchanges looking to passport into Europe via MiCA, with the companies including Bitpanda, Bybit and Bitget establishing bases in Vienna.

When the license was granted, the FMA said the key functions of AML officer and sanctions compliance officer and their respective deputies were occupied in accordance with MiCA and the Financial Markets Anti-Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäschegesetz).

“According to the FMA’s knowledge, this is no longer the case,” the FMA said.

Pre-market trading is showing signs of stabilization, with bitcoin rebounding above $66,000 after briefly falling to $64,400 on Sunday.

The move higher comes amid continued uncertainty surrounding President Trump’s proposed tariffs and U.S. tensions with Iran, factors that have weighed on broader risk sentiment.

Strategy (MSTR), the largest publicly traded holder of bitcoin, is down 2% in pre-market trading as it prepares to announce its 100th bitcoin purchase since embarking on its BTC treasury strategy in 2020.

Other crypto related equities have also pared earlier losses, with MARA Holdings (MARA), Coinbase (COIN), and Bullish (BLSH) are each down about 2%, trimming prior steeper declines. AI focused miners such as IREN (IREN) and Cipher Mining (CIFR) are faring slightly better, off roughly 1%.

The sharp Sunday drop pushed the Fear and Greed Index down to 6, marking fresh lows and extending a seven day stretch of extreme fear. Despite that, bitcoin’s recovery suggests dip buying interest is emerging at lower levels.

The broader selloff appears relatively contained within tech. Invesco QQQ (QQQ) is down just 0.3%, while the iShares Expanded Tech Software Sector ETF, (IGV), is lower by 1% near $80, underscoring the ongoing correlation between bitcoin and software stocks.

Precious metals are the clear beneficiaries of the risk aversion. Gold has climbed above $5,100 per ounce and silver is approaching $87. Meanwhile, the DXY index is hovering just below 98, reflecting a firm US dollar, weighing on risk appetite.

Brent, WTI fell ~3–5% Monday after Trump’s 15% tariffs and easing Iran war risk.

President Donald Trump raised temporary tariffs from 10% to 15% on all U.S. imports over the weekend, according to a White House announcement. The increase followed a U.S. Supreme Court ruling that struck down the previous tariff program.

Financial markets responded with gold prices rising and U.S. equity futures declining. Market analysts stated that oil prices were affected by the same risk-averse trading sentiment. Higher tariffs typically reduce trade volumes, weaken industrial output, and suppress fuel demand, factors that are considered bearish for crude prices, according to commodity analysts.

A third round of nuclear negotiations between the United States and Iran is scheduled for Thursday in Geneva, Oman’s foreign minister confirmed. Iranian officials have indicated the country may offer concessions on its nuclear program in exchange for sanctions relief, according to diplomatic sources.

Concerns about potential military conflict in the Middle East had recently supported higher oil prices, but that geopolitical risk premium has diminished as traders assign a lower probability to supply disruptions from the region, market observers said.

Goldman Sachs forecasts the global oil market will remain in surplus in 2026, assuming no major disruption to Iranian supply, the investment bank stated in a research note. The bank revised its fourth-quarter price forecasts, citing lower inventories among Organisation for Economic Co-operation and Development (OECD) countries as a factor in its WTI adjustment.

Market direction remains uncertain in the short term due to unresolved factors including tariff policy, Iran diplomacy, and the Russia-Ukraine conflict, suggesting continued volatility in oil prices, according to market analysts.

Crypto markets are flashing deep stress signals as geopolitical tensions surrounding a potential U.S. strike on Iran intensify and liquidity continues to drain from the system.

Iran strike fears spill into crypto markets

The Crypto Fear & Greed Index has plunged to 5 — “Extreme Fear”, one of the lowest readings in years, showing panic-level sentiment. Historically, such extreme readings have only appeared during major market dislocations, including the 2020 COVID crash and the 2022 bear market lows.

The collapse in sentiment mirrors Bitcoin’s sharp drop below key technical levels, reinforcing the view that traders are positioning defensively amid geopolitical uncertainty.

At the same time, prediction market Polymarket shows rising bets on possible U.S. military action in early March, with probabilities climbing steadily day by day, reflecting growing geopolitical uncertainty priced into markets.

Meanwhile, price action mirrors the anxiety. Bitcoin has fallen sharply from recent highs and is trading well below its 50-day moving average, while the broader crypto market has shed more than $2.22 trillion, down over 50% from its peak.

In a widely shared post, Coin Bureau warned that “CRYPTO MAY BE HEADING TOWARD ITS LARGEST CRASH EVER,” noting that the current drawdown is now the second-biggest dollar loss in history, just $60 billion shy of the all-time record.

Yet liquidity data suggests a more nuanced picture. Another Coin Bureau analysis highlighted that USDT supply has fallen by more than $3 billion in 60 days, a contraction last seen during the FTX collapse.

Historically, shrinking stablecoin supply signals capital leaving the market but similar conditions in 2022 marked Bitcoin’s cycle bottom.

Ultimately, while a potential U.S. strike on Iran could trigger another wave of short-term volatility, the data suggests markets may already be pricing in extreme risk. With sentiment at capitulation levels, over $2.22 trillion erased, and stablecoin liquidity contracting to levels previously seen near cycle lows, the conditions resemble late-stage selloffs more than the early phases of a collapse.

South Korea’s central bank has reportedly renewed its push to keep Korean won-pegged stablecoin issuance in the hands of commercial banks, warning lawmakers that privately issued digital tokens could undermine monetary policy and create new foreign-exchange and financial-stability risks.

In a report submitted to South Korea’s National Assembly Strategy and Finance Committee, the Bank of Korea (BOK) described won stablecoins as “currency-like substitutes” and said their introduction must account not only for industrial benefits but also for monetary policy, foreign exchange stability and financial risks, according to local reporting. 

The central bank reiterated concerns that stablecoins could be used to bypass foreign exchange regulations, including prior reporting requirements, and argued that allowing non-bank entities to issue them independently could conflict with Korea’s separation of banking and commerce principles. 

It added that banks, which are subject to capital, governance and compliance standards, should be permitted first, with any expansion beyond banks proceeding gradually after risk assessments. 

The report lands as lawmakers debate a delayed stablecoin framework, with one of the main sticking points being who should be eligible to issue won-pegged tokens and how much control banks should hold in any issuing entity.

Cointelegraph reached out to the Bank of Korea for more information, but had not received a response by publication.