CoinSignals

Matt Hougan has rejected claims that trading firm Jane Street is responsible for Bitcoin’s recent drop, describing the downturn as a typical crypto winter rather than a coordinated effort. Writing on X on February 26, the Bitwise Asset Management executive said the pullback reflects normal market cycles, not manipulation.

His remarks follow renewed online speculation and legal headlines as Bitcoin trades more than 46 percent below its all time high.

Lawsuits and Market Speculation

Debate intensified after reports that Terraform Labs’ bankruptcy administrator filed a lawsuit against Jane Street in federal court in Manhattan. The complaint alleges the firm used insider knowledge ahead of the May 2022 Terra Luna collapse, including a large TerraUSD withdrawal from Curve’s liquidity pool shortly after Terraform removed significant funds. Jane Street has denied the accusations and attributed the collapse to Terraform’s leadership.

Separately, some analysts such as Bull Theory claimed Jane Street operates a daily selling strategy aimed at pressuring Bitcoin prices. They also referenced an interim order from India’s Securities and Exchange Board concerning alleged index manipulation tied to expiry days. That matter remains under appeal.

Hougan dismissed these claims, arguing that Bitcoin’s weakness is better explained by investors closing long positions, cutting leverage, and reallocating capital. He also shared analysis from colleague André Dragosch, whose data on intraday trading since US spot ETF launches in January 2024 shows more consistent weakness during non US hours rather than at a fixed morning time in New York.

Macro strategist Alex Krüger supported Hougan’s view, stating that large trading firms and authorized participants primarily arbitrage price differences between ETFs, futures, and spot markets rather than direct price suppression.

Broader Structural Debate

The discussion has also revived questions about ETF mechanics. ProCap CIO Jeff Park recently noted that the issue is less about any single firm and more about how authorized participants operate within regulatory frameworks that allow in kind creations and redemptions. Critics argue that hedging ETF exposure through futures instead of buying spot Bitcoin could reduce direct spot demand.

So far, none of the legal actions or regulatory filings have demonstrated coordinated wrongdoing in Bitcoin markets. Still, the presence of major quantitative firms and complex derivatives strategies has fueled suspicion during the downturn.

For Hougan, the explanation remains straightforward. He attributes the pullback to Bitcoin’s typical four year cycle, deleveraging, and shifting investor focus. In his view, the market is simply experiencing a standard winter phase that will eventually give way to recovery.

The end of the week and month brings a large wave of crypto options expirations, with roughly 115,500 Bitcoin contracts set to expire on February 27. These contracts carry a notional value of about 7.8 billion dollars, significantly larger than a typical weekly expiry and potentially capable of adding short term volatility to spot markets.

Despite a brief midweek bounce, total crypto market capitalization remains largely unchanged and the broader trend still points downward.

Bitcoin Options Snapshot

This week’s Bitcoin options show a put to call ratio of 0.76, indicating more calls than puts are expiring. According to CoinGlass, the max pain level sits near 75,000 dollars, well above current spot prices, suggesting many positions may expire out of the money.

Open interest remains concentrated at the 60,000 and 50,000 dollar strike levels on Deribit, reflecting growing bearish positioning. Total Bitcoin options open interest across exchanges has climbed to around 37 billion dollars this month.

Analytics firm Greeks Live noted that this expiry represents about 20 percent of total open interest, with Bitcoin’s share reaching a multi year high. The firm added that the market continues to lack fresh capital inflows and clear bullish catalysts, while negative sentiment dominates.

Ethereum Contracts Also Expire

Alongside Bitcoin, about 477,000 Ethereum options contracts are expiring, with a notional value of roughly 963 million dollars. Max pain is estimated at 2,200 dollars, and the put to call ratio stands at 0.77. Total Ethereum options open interest across exchanges is approximately 6.6 billion dollars.

Combined, the total notional value of today’s crypto options expirations is close to 9 billion dollars.

Spot Market Outlook

The broader market has turned lower again, with total capitalization slipping 1.3 percent to below 2.4 trillion dollars. Bitcoin has fallen back under 67,000 dollars after failing to hold above 68,000, while Ethereum is hovering near the 2,000 dollar level as hopes for a sustained relief rally continue to fade.

Transaction fees on the BNB Smart Chain have dropped to about 593,000 dollars, marking the lowest level of network costs since at least August 2025. The slowdown in on chain activity mirrors a similar quiet period last summer that was followed by a powerful rebound in Bitcoin.

Weak Activity May Signal a Turning Point

Blockchain fees are a direct reflection of user demand, as they represent what participants pay to transfer tokens or interact with decentralized applications. When fees decline sharply, it usually indicates lighter congestion and reduced speculative interest.

Data shared by analyst Amr Taha shows that on February 23, BSC fees fell to 593,000 dollars, well below the previous low of 1.07 million dollars recorded on August 7, 2025. At that time, Bitcoin was trading near 55,000 dollars. The earlier drop in fees helped mark a significant bottom before BTC went on to rally more than 95 percent.

Taha also highlighted a sharp decline in Bitcoin’s short term holder realized market capitalization, which fell to around 386 billion dollars on February 24. This is considerably below the prior low of 440 billion dollars recorded in April 2025. Historically, contractions of this kind have aligned with heavy capitulation phases that preceded strong rebounds, including the surge from roughly 78,000 dollars to above 108,000 dollars after the April 2025 low.

Derivatives Reset and Market Outlook

Although lower spot activity reflects caution, the derivatives market appears to be undergoing a broad reset. According to XWIN Research Japan, Bitcoin futures open interest has fallen significantly, signaling widespread deleveraging. Analysts noted that the recent price decline occurred alongside shrinking open interest, suggesting that liquidations and derivatives unwinds drove the move rather than aggressive spot selling. Such resets can help stabilize markets even if they do not immediately indicate renewed buying interest.

Options positioning adds another layer of complexity. Research from Coinbase Institutional points to a substantial negative gamma zone between 60,000 and 70,000 dollars. In this setup, dealer hedging activity can intensify price swings, meaning a decisive break below 60,000 dollars could accelerate downside momentum.

Some indicators, however, suggest limited immediate selling pressure. The Binance Fund Flow Ratio remains low at around 0.012, implying that panic driven inflows to exchanges have not materialized during the recent pullback toward the mid 60,000 dollar range.

Even so, analysts caution that muted inflows do not equate to strong accumulation, and broader demand trends have yet to show a clear upward shift.

For a sustainable bottom to take shape, stronger support from spot market volume will likely be necessary. At the time of writing, Bitcoin is trading just above 68,000 dollars, down about 23 percent over the past month and more than 46 percent below its all time high above 126,000 dollars.

The upcoming 2026 US midterm elections are increasingly seen as a potential catalyst for financial markets, including cryptocurrencies, as they may coincide with shifts in liquidity conditions.

Asset Prices Matter More Than Politics

A macro analysis from market participant Egrag Crypto suggests that early betting markets indicate relative Republican weakness. This could create incentives for economic policies favorable to markets in the lead-up to the election.

The framework describes three phases. The first phase involves a broad market correction in early 2026, accompanied by growing criticism of Federal Reserve Chair Jerome Powell. This is followed by pressure in mid-2026 for a shift in monetary policy, which could lead to liquidity easing as policymakers respond to both economic and political pressures. Finally, the second half of 2026, coinciding with the election period, could see markets enter a recovery phase.

The thesis emphasizes that rising asset prices tend to boost public sentiment, aided by factors such as dividend income, potential tax relief for small businesses, and positive economic sentiment. It also notes that the Federal Reserve often becomes a focus of blame during downturns, which can allow political narratives to adjust as liquidity conditions improve.

This perspective reinforces the idea that market structure and liquidity trends often lead political outcomes, rather than politics driving market movements. In other words, markets typically move first, and political developments follow.

Lessons From 2024

During the 2024 US elections, cryptocurrencies rallied sharply following Donald Trump’s victory. Bitcoin reached record highs amid optimism about a more crypto-friendly regulatory environment and pro-crypto lawmakers in Congress.

By early 2026, however, much of this post-election momentum had faded. Bitcoin retraced toward 60,000 dollars, and overall crypto sentiment cooled due to macroeconomic pressures and diminishing election-driven optimism.

Bitrue reported a sharp rise in XRP spot buying on February 26, noting a 212 percent increase in purchase volume. According to the exchange, buy orders were more than twice as large as sell orders that day.

The platform connected this surge to continued institutional allocations through recently introduced XRP exchange traded funds. It stated that these products have attracted about 1.1 billion dollars in cumulative inflows, suggesting that steady participation from funds and retail investors could gradually reduce available supply.

Spot Demand Strengthens Amid ETF Interest

In a post on X, Bitrue explained that XRP buy activity significantly outweighed selling pressure on its platform. The exchange attributed this imbalance to ongoing institutional accumulation since the launch of XRP ETFs, which it claims have gathered around 1.1 billion dollars in net assets. However, data from SoSoValue indicates that ETF flows have been relatively subdued in recent days.

While spot demand appears strong, derivatives data paints a more cautious picture. Figures from CryptoQuant show that XRP futures open interest has declined across major exchanges over the past three months. On Binance, open interest dropped by 7.7 million XRP, while Bybit recorded a reduction of roughly 12 million tokens. In addition, the three month moving average of XRP futures trading volume has fallen to about 87 billion dollars, its lowest level since November 2024.

At the time of writing, XRP was trading near 1.44 dollars. The token gained nearly 5 percent over the past 24 hours and around 2 percent during the week. Despite this short term strength, it remains down more than 23 percent over the past month and nearly 38 percent over the past year, well below its July 2025 peak of 3.65 dollars.

Lower Leverage Alongside Firm Spot Buying

The contrast between rising spot purchases and shrinking derivatives exposure points to a shift in market structure rather than broad based bullish momentum. Open interest currently stands near 2.37 billion dollars based on data from CoinGlass. The pullback in leveraged positions may indicate that traders are scaling back risk following extended volatility.

Price action remains confined within a narrow band between 1.38 and 1.48 dollars over the last 24 hours. Market analyst CasiTrades has identified resistance levels near 1.40 and 1.65 dollars, with support around 1.11 and 0.87 dollars. A sustained breakout above resistance would likely depend on stronger ETF driven inflows and broader market participation.

Overall, while Bitrue’s data highlights robust exchange level demand, broader indicators suggest the market is adjusting and stabilizing rather than entering a rapid expansion phase.

Even so, Bitrue maintains an optimistic outlook. The exchange believes that increasing retail and institutional involvement could create tighter supply conditions, potentially allowing XRP to outperform major competitors in the second quarter of 2026.

Bitcoin rebounded to 68,000 dollars after several days of losses, gaining about 4 percent as markets responded positively to Donald Trump’s State of the Union address. Despite the bounce, broader data suggests the asset remains stuck in a fragile consolidation phase rather than a true recovery.

BTC continues to trade between 60,000 and 69,000 dollars, a range now viewed as a key demand zone. Analysts at Glassnode describe the current environment as stabilization without confirmation of renewed strength.

Current Market Structure

With Bitcoin sitting roughly 46 percent below its all time high, the drawdown resembles conditions typically seen in the middle to later stages of a bear market. About 9.2 million BTC are currently held at a loss, meaning close to half of the circulating supply is underwater. While this aligns with past late cycle bear phases, it does not automatically signal a turnaround.

Accumulation remains weak. The Accumulation Trend Score has stayed below 0.5 since early February, pointing to limited conviction buying, especially from larger investors who are usually essential in forming a durable bottom.

Liquidity metrics reinforce this cautious outlook. The 90 day Realized Profit Loss Ratio has fallen below the key 1.0 level, indicating realized losses are outweighing profits. Such conditions can persist for extended periods and often reflect reduced capital rotation alongside elevated downside risk.

Market breadth is also narrowing, with fewer assets holding above long term trend levels. Off chain data tells a similar story. Spot markets have shifted toward sell side dominance, as cumulative volume delta across major exchanges has dropped to cycle lows, suggesting active distribution rather than simple liquidity gaps.

In derivatives, leverage has largely reset. Perpetual funding rates have returned to neutral, signaling that speculative excess has eased but also that strong bullish conviction has yet to reappear. Options markets show a comparable defensive stance.

Dealer positioning implies that while sharp moves can still be amplified mechanically, the broader structure remains one of consolidation. Neither buyers nor sellers have taken clear control.

According to Glassnode, a sustained recovery would require renewed spot demand to absorb ongoing distribution, stronger accumulation from large holders, and a meaningful shift in institutional flows. Until these changes occur, range bound trading between established valuation levels is likely to continue defining Bitcoin’s market behavior.

Macro and Geopolitical Factors

In the near term, macroeconomic and liquidity dynamics may continue shaping price action within this defensive structure. Analysts at Bitunix noted in comments to CryptoPotato that stronger safe haven demand for the dollar could pressure Bitcoin back toward the 65,000 to 64,000 dollar liquidity zone. On the other hand, a shift toward an anti inflation narrative could attract short term inflows and push prices toward liquidity clustered near 69,000 dollars. Ultimately, much depends on whether geopolitical tensions escalate in a meaningful way.

Ethereum co founder Vitalik Buterin has moved beyond his previously announced plan to sell 16,384 ETH, with on chain data showing total disposals now exceeding 18,684 ETH, valued at more than 38 million dollars. The latest wave of selling unfolded as Ethereum continues to trade well below its former peak above 4,900 dollars reached last summer.

Blockchain analytics firm Lookonchain first reported that wallets linked to Buterin had crossed the initial 16,384 ETH threshold he disclosed on January 31, 2026. At the time, he explained that the funds would support open source software and hardware development, privacy initiatives, and security focused infrastructure, describing the move as part of a period of moderate austerity for the Ethereum Foundation.

The selling began in early February and progressed in stages. Initial transactions included nearly 3,000 ETH sold over several days at an average price slightly above 2,200 dollars. Within 24 hours, cumulative sales had more than doubled, and additional withdrawals from lending platforms such as Aave followed later in the month.

The heaviest activity occurred between February 25 and 26, when millions of dollars worth of ETH were sold in a short span, including roughly 2,300 ETH after Ethereum recorded its first 10 percent daily gain in more than four months. Trade data shows that many of the transactions were routed through CoW Protocol, which breaks large orders into smaller swaps to reduce market impact. These cumulative moves pushed total sales well beyond the original 16,384 ETH plan.

Despite the disposals, data from Arkham Intelligence indicates that Buterin still holds more than 240,000 ETH across associated wallets, leaving him among the largest individual holders of the asset.

Ethereum’s price has remained volatile throughout the selling period. According to CoinGecko, ETH is currently trading near 2,050 dollars, up more than 8 percent in the past day but still significantly lower on a monthly and yearly basis.

Analyst Ali Martinez noted that Ethereum’s broader decline has coincided with sizable ETF outflows, with institutional products shedding more than half a million ETH in recent weeks. If downside pressure persists, he identified key levels to monitor near 1,800 dollars, followed by deeper support zones around 1,584, 1,238, and potentially close to 1,089 in a more severe correction scenario.

Ethereum climbed back above the 2,000 dollar level on Wednesday, gaining 8 percent in 24 hours as broader market sentiment improved. At the same time, fresh data suggests the asset may be entering a far more dynamic and uncertain phase.

CryptoQuant reports that Ethereum’s 30 day realized volatility on Binance has jumped to roughly 0.97, its highest reading since March 2025. This sharp rise signals that daily price swings have expanded significantly after weeks of relatively calm trading. The increase in volatility, combined with price consolidation around a mid range support zone, reflects a clear standoff between buyers and sellers positioning for a larger move.

According to the analytics firm, this type of volatility expansion typically represents a repricing phase rather than random short term noise. Structurally, the market appears to have shifted out of a low volatility environment into one marked by faster reactions and heightened uncertainty. If rising volatility is accompanied by strong directional momentum, Ethereum could see a decisive breakout. If not, the asset may remain range bound until conviction strengthens.

Historically, similar spikes in volatility have often preceded powerful rallies, placing ETH at what could be a pivotal moment. Some analysts also note that Ethereum is trading within a long term demand zone that has previously favored accumulation.

On chain metrics reinforce that view. Data from Santiment shows Ethereum’s 30 day MVRV at negative 5.5 percent, suggesting the asset is slightly undervalued despite the recent rebound. Negative MVRV indicates that recent buyers are, on average, holding at a loss, a condition that has historically aligned with favorable risk reward setups rather than market tops.

Institutional flows are also improving. On February 25, US spot Ethereum ETFs recorded more than 157 million dollars in net inflows, marking the strongest daily demand in over a month. Fidelity’s FETH led with 62 million dollars, followed by Grayscale’s ETHE with 33.8 million and BlackRock’s ETHA with 31 million, signaling renewed institutional appetite as volatility returns to the market.

Bitcoin rebounded sharply after sliding to a three week low of 62,500, surging more than 8,000 dollars to briefly touch 70,000. However, strong selling pressure emerged at that level, preventing a breakout and pushing BTC back down near 68,000. Even so, the asset remains up about 4.5 percent on the day, with its market capitalization recovering to roughly 1.36 trillion dollars and dominance holding just above 56 percent.

The recent volatility followed last week’s rejection at 70,000, which triggered a steady decline toward 65,600. Although BTC attempted to recover over the weekend, renewed macro uncertainty and futures market pressure sent it tumbling to 64,400, then eventually to 62,500. Buyers stepped in decisively at that point, fueling the rapid rally back to 70,000 before momentum cooled.

Altcoins posted even stronger gains during the rebound. Ethereum climbed 8 percent to reclaim the 2,000 level, reinforcing speculation that it may have already formed a local bottom. XRP rose 5.5 percent to move back above 1.40, while Solana, Dogecoin, BNB, and HYPE delivered similar advances. Chainlink outperformed many peers with a 9 percent jump.

Cardano stood out among large cap assets, surging 10 percent to approach 0.30. Polkadot led the broader market with a 24 percent spike to around 1.60, while STABLE, Uniswap, and NEAR also recorded impressive double digit gains.

Overall, the total crypto market capitalization has expanded by about 120 billion dollars from its recent lows, climbing to approximately 2.425 trillion dollars as risk appetite returned across digital assets.

Crypto markets staged a strong rebound, with total market capitalization climbing 3.7 percent and adding roughly 120 billion dollars to reach 2.43 trillion. Just days after investors feared a drop toward 60,000 dollars, Bitcoin pushed back toward the 70,000 level, reigniting optimism across the market.

Santiment noted that bullish narratives have quickly resurfaced, with traders shifting back into fear of missing out mode. Bitcoin briefly touched 70,000 before slipping to around 68,000, raising concerns that the move could turn into a classic bull trap.

Analyst Chiefy argued that Bitcoin may be entering the final bull trap of the current cycle, claiming price action resembles the 2022 pattern and forecasting a potential drop toward 44,000 within days. A bull trap occurs when price rallies during a broader downtrend, attracting buyers before resuming lower and forcing late entrants to exit at a loss.

CryptoQuant analyst PelinayPA offered a more measured view, describing the surge as a relief rally. She highlighted that the Fund Flow Ratio, which tracks BTC inflows to Binance relative to holdings on the exchange, remains low at 0.012. Fewer coins moving to exchanges typically reduce immediate selling pressure and can support short term upside. If the ratio stays subdued, she said, the market could even see a short squeeze that drives prices higher temporarily.

Others see structural changes behind the rebound. Analyst Bull Theory suggested that after legal action involving Jane Street, persistent selling pressure eased, allowing the market to add more than 200 billion dollars in 48 hours. For the first time in weeks, there were two consecutive days without aggressive downside pressure.

MN Fund founder Michaël van de Poppe downplayed the specific catalysts, whether linked to options positioning, institutional activity, or equity correlations. In his view, Bitcoin’s current valuation remains deeply discounted, implying that the broader upside potential could outweigh the risk of a short lived trap.