It was a brutal start to the week for crypto, with SOL leading the sell-off and pressure spilling into the broader altcoin space. But BTC and ETH held their ground, showing resilience while capital rotated into high-conviction names.
Crypto: Solana’s Bloodbath, ETH’s Stability, and BTC’s Resilience
The crypto market was dominated by the continued decline of Solana, with SOL down approximately 10% on the week and 30% on a monthly basis. What was driving these moves?
- SOL’s upcoming token unlock (March 1), including USD 2 billion worth of SOL from the FTX bankruptcy auction, weighed on price action, forcing hedging flows into the broader market. SOL saw a sharp sell-off down to USD 160 before rebounding back above USD 177 this morning, still leaving it 10% down for the week.
- The LIBRA token scandal shook the industry, adding to SOL’s woes. The Argentine meme coin—endorsed by President Javier Milei—exploded to a USD 4 billion valuation before crashing.
- The contagion effect was clear, with high beta names like JUP and RAY posting outsized losses for the week reflecting broader negative sentiment towards Solana’s ecosystem.
Despite the turmoil, ETH held firm around USD 2,700, with rotation into ETH gaining traction as investors looked for stability. Meanwhile, BTC also showed resilience, holding above USD 92,000, a level that remained intact even during the biggest liquidation bloodbath a few weeks ago.
BTC enters Friday’s session above USD 98,000, looking poised for another attempt at USD 100,000.
- Trump’s tariff threats are escalating, but as we have noted before, this seems like a negotiation tactic straight out of his playbook. Given the broader macro environment, markets appear to be coming to terms with it.
- This week’s FOMC minutes confirmed what we already knew – rate cuts are not coming soon. However, the Fed signalled a willingness to pause balance sheet reduction, a move that could add liquidity and fuel risk assets over time.
- Markets continue to respond asymmetrically to weak US data. Last week’s retail sales, jobless claims, and manufacturing numbers this week – have all served to trigger a stronger reaction (compared to in line or stronger numbers) in risk assets, with equities nudging record highs.
- The USD continues to show topping out, with DXY breaking below 107.00, while US 10-year yields are back below 4.5%. We continue to expect weaker USD against macro backdrop and for this to be a catalyst for risk assets and in particulary crypto.
- If BTC reclaims USD 100,000 → A confirmed break could trigger a momentum surge, similar to previous cycles where BTC lagged before taking the lead.
- If ETH breaks decisively above USD 2,700 → Would reinforce its relative strength and drive broader altcoin sentiment.
- SOL’s post-unlock reaction → Will capitulation flows drive SOL lower, or will buyers step in as the supply overhang clears?
Final Thoughts
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