Citrini’s AI economic report, the shutdown of 3 Solana platforms following a hack, and the Fed’s proposal to end Operation Chokepoint 2.0 have intensified crypto market volatility amid extreme fear and macroeconomic pressure. The cryptocurrency market showed significant weakness today as overall sentiment plunged into deep pessimism. This downturn is primarily driven by the dual pressures of a harsh macroeconomic environment and persistent institutional capital outflows. Bitcoin (BTC) trended lower during the early Asian trading hours and briefly dropped below the $63,000 level. This price action highlights a severe lack of buying momentum as the market struggles to find positive catalysts. Meanwhile, Ethereum (ETH) saw limited performance due to heightened leverage liquidation risks in the derivatives market. Data shows that spot Bitcoin ETFs have recorded four consecutive months of net outflows with total holdings down by 85,000 BTC since October 2025. This trend reflects a cooling appetite for high-risk assets among institutional investors under current restrictive monetary policies.

Crypto Markets Overview

Current market sentiment is extremely fragile as the Crypto Fear & Greed Index currently stands at 8. This "Extreme Fear" status indicates that investors maintain a highly cautious or even bearish outlook on the short-term future. Under such intense emotional pressure, Bitcoin continues to solidify its role as a market value anchor. Even when prices pull back, its status as a mainstream defensive asset attracts capital seeking a temporary safe haven. This function is critical for buffering broader market shocks. In contrast, Ethereum remains hindered by the leveraged structure of the derivatives market. The presence of massive on-chain liquidation zones makes ETH price action more vulnerable to downward pressure. Overall, risk appetite remains subdued and trading behavior is dominated by hedging and position reduction. The market continues to exhibit defensive characteristics in the absence of strong liquidity support.

Source: Alternative

Weak Buying Momentum Increases Volatility and Liquidation Risks

Current trading behavior and market structures show that Bitcoin and Ethereum are both situated within critical liquidation clusters. Data indicates that a BTC move above $66,725 would trigger USD 1.362 billion in cumulative short liquidations across major CEXs. Conversely, a drop below $60,903 would trigger approximately USD 721 million in long liquidations. The market is currently suffering from a lack of follow-through buying. This is largely because the steady drain of capital from spot ETFs has caused local liquidity to dry up. Therefore, price volatility is being driven by leveraged positions rather than actual spot demand. For Ethereum, the liquidation risks are equally concentrated. A breakthrough at $1,922 would trigger USD 692 million in short liquidations while a drop below $1,748 would lead to USD 360 million in long liquidations. This "pincer" structure has forced the market into a period of range-bound consolidation. Investors are largely staying on the sidelines while waiting for clarity on Federal Reserve policy.

Key News Highlights:

AI Economic Impact Report Triggers Market Anxiety and Tech Stock Sell-off

A new report titled "Global Intelligence Crisis" by Citrini Research has gained widespread attention and triggered a sharp decline in software and payment stocks. The report introduces the concept of "Ghost GDP," referring to economic output generated by AI agents that shows up in national data but never circulates in the real economy. Citrini theorizes that AI agents could drive corporate profits while making human labor increasingly redundant. This could eventually lead to mass white-collar layoffs and a significant drop in consumer spending. These concerns combined with broader macroeconomic uncertainty have directly impacted the crypto market. Bitcoin has struggled to reclaim its previous highs partly due to these shifting investor expectations. Many are now re-evaluating the long-term balance between rapid technological progress and global economic stability.

Three Solana Platforms Announce Closure Following Massive Security Breach

Three prominent Solana-based platforms have announced they are winding down operations following a devastating USD 27 million hack in January. Step Finance, a major DeFi aggregator, confirmed the closure of its operations along with its subsidiaries SolanaFloor and Remora Markets. The team stated they were unable to secure a viable outcome through financing or acquisition after the breach. Blockchain security firms reported that approximately 261,854 SOL was unauthorizedly unstaked and transferred from treasury wallets during the incident. This security failure dealt a fatal blow to the platforms' financial health. The native STEP token price crashed toward zero shortly after the announcement. This event contributed to a 50% decline in Solana DeFi Total Value Locked (TVL) since its September peak. The triple closure serves as a stark reminder of the extreme vulnerabilities regarding asset management within decentralized protocols.

Federal Reserve Proposes Rule to End Operation Chokepoint 2.0

The US Federal Reserve is seeking public feedback on a proposal to formally remove "reputation risk" from banking supervision guidelines. Many in the crypto industry believe this could put an end to the coordinated effort known as Operation Chokepoint 2.0. This practice was blamed for cutting off lawful crypto firms from essential traditional banking services. Fed Vice Chair for Supervision Michelle Bowman emphasized that debanking customers based on political or religious beliefs is unlawful. She stated that such discrimination has no place in the Federal Reserve's supervisory framework. Industry leaders and researchers have praised this move as a critical step toward making the US a global digital asset hub. If passed into law, this proposal would ensure that crypto companies receive fair access to banking services based on financial risk rather than political pressure.

Trending Tokens:

• $ESP (Espresso Systems)

Espresso Systems has achieved a significant milestone in enterprise adoption with the live deployment of Ligero as its integrated Layer 2 solution. This development introduces a sophisticated on-chain payment system. It successfully addresses the traditional trade-off between blockchain transparency and corporate privacy requirements. By leveraging Espresso’s fast finality and BFT consensus infrastructure, Ligero enables private salary payments and instant stablecoin settlements. The system also guarantees regulatory compliance through cryptographic methods rather than manual management. Market interest is high because Espresso currently uses this system for its own internal operations. This real-world validation in a high-stakes environment proves the technology is ready for production. $ESP is now positioned as a foundational layer for institutional financial applications requiring both decentralization and data privacy.

• $LA (Lagrange)

Lagrange has recently generated significant market interest following the introduction of its DeepProve technology. This advancement drastically enhances the computational power of its ZK coprocessor. The new technology allows the generation of zero-knowledge proofs for complex AI models at twenty-five times the previous speed. Lagrange provides the essential infrastructure needed for the era of verifiable AI. It processes massive datasets off-chain while submitting verifiable results on-chain. Recent surges in open interest on major exchanges suggest that traders are positioning for the decentralized AI verification narrative. Furthermore, the upcoming implementation of token delegation and staking is expected to reduce the circulating supply of $LA. Lagrange is effectively positioning itself as a critical bridge between big data processing and blockchain security.

• $UP (Superform)

The launch of the $UP token marks a pivotal transition for Superform as it evolves into a user-owned neobank model. This development follows the deployment of SuperVaults v2 and a new mobile application. The platform aims to simplify the cross-chain yield experience for retail users. Superform aggregates over eight hundred earning opportunities across various EVM networks into a single interface. This approach effectively lowers the barrier to entry for sophisticated DeFi strategies. The market highly values the protocol’s ability to offer a bank-like experience with full self-custody. Recent listings on major regulated exchanges have provided a significant liquidity boost to the ecosystem. $UP is now viewed as a primary gateway for the next wave of capital entering decentralized finance.

Disclaimer: The information provided in this section is for informational purposes only and doesn't represent any investment advice or FameEX's official view.