Diversitas

1. Market Overview

February has officially gone down as one of the worst on record for both crypto and equities. Panic-driven selling erased most of the “Trump rally” gains, as markets reacted to tariff concerns and policy uncertainty. That being said, several bullish catalysts are emerging beneath the surface, including a 1.51% Truflation reading in the U.S.—the lowest in years—potentially paving the way for rate cuts and a liquidity boost🤔

Additionally, over $300 billion was injected into the economy through different programs in just three days, which historically benefits risk-on assets. BlackRock’s Bitcoin ETF inclusion in its $150B model portfolio may kickstart the next major wave of institutional adoption. With signs of capitulation and record liquidations, we believe the bottom is in, and a recovery is underway👀

Finally, President Trump has announced a Crypto Strategic Reserve consisting of Bitcoin and other top cryptocurrencies. This is consistent with his week-one E.O. 14178. President Trump is keeping his promise to make the U.S. the “Crypto Capital of the World.” More is expected to come at the Summit this week!🔥

P.S. If recovery continues as expected, our new algorithm transition should be completed over the coming days, positioning us well for the next leg up.

2. ETF Flows

This week, both Bitcoin and Ethereum ETFs experienced significant outflows:

• BTC ETFs Weekly Flow: -$2.61 billion
• ETH ETFs Weekly Flow: -$335 million

Despite the heavy outflows, Friday brought a positive shift, as BlackRock officially integrated its Bitcoin ETF into its $150 billion model-portfolio universe. This move could pave the way for a new wave of institutional adoption and inflows.

Additionally, ETF issuers continue to report growing interest from larger clients, signaling that institutional participation in crypto is only just beginning to accelerate💪

3. On-Chain Data

• Coinbase Premium: Negative🤔
• Exchange Reserves: Low✅
• MVRV Ratio: 1.94 (Cycle Top Above 3.7)✅
• Net Unrealized Profit/Loss (NUPL): 48 (Cycle Top Above 75)✅
• Open Interest: Low✅
• Funding Rates: Low✅
• CMC Fear and Greed Index: 39 (Fear)✅

This week, we witnessed the largest long liquidation in Bitcoin since October 2021, a strong signal that we may have reached a bottom. Events of this magnitude are rare and have historically been followed by sharp, impulsive rebounds as the market resets and liquidity returns. If history repeats itself, a strong recovery could be on the horizon🚀

4. Top Weekly News

Bitcoin set for second-worst February on record, Coinbase cites lack of positive catalysts

https://www.theblock.co/post/343954/bitcoin-worst-february-coinbase

Bitcoin dips below $80,000 and ETH tests $2,100 amid Trump tariff concerns

'Extreme fear': Crypto Fear & Greed Index hits multi-year low

https://www.theblock.co/post/343758/extreme-fear-crypto-fear-greed-index-hits-multi-year-low-as-bitcoin-sinks-below-86000

https://www.theblock.co/post/343924/bitcoin-dips-below-80000-and-eth-tests-2100-amid-trump-tariff-concerns

Trump to address industry leaders at first Crypto Summit on Friday, as regulators abandon key lawsuits

https://www.theblock.co/post/344087/trump-to-address-industry-leaders-at-first-crypto-summit-on-friday-as-regulators-abandon-key-lawsuits?utm_source=twitter&utm_medium=social

BlackRock adds bitcoin ETF to portfolio marketed to financial advisors

https://www.theblock.co/post/344030/blackrock-adds-bitcoin-etf-to-portfolio-marketed-to-financial-advisors-report

CME Group to launch Solana futures on March 17 as ETF momentum builds

https://www.theblock.co/post/343980/cme-group-solana-futures-march-17

5. Summary

While ETF issuers and many prominent figures in the industry believe that there has never been a better time for crypto, Bitcoin and the broader altcoin market have reached an extreme level of oversold conditions. In fact, the market was on Friday more oversold than it was during the FTX collapse, when Bitcoin dropped to $16,000. This highlights the sheer magnitude of forced liquidations and aggressive sell pressure that has unfolded over the past few days. With most long positions now wiped out, the logical next move is upward, as market structure resets and selling exhaustion sets in. To make the setup even more bullish, we just printed the biggest demand wick in the history of $BTC and crypto👀

Looking ahead, the easing cycle is right around the corner, and with it, we could finally see the start of a true bull market—one that aligns with historical cycles. So far, the price action has not reflected the kind of rally we anticipated, but with macro conditions improving, institutional adoption growing, and liquidity injections increasing, the stage is set for the next major move. The bottom is likely in—now it’s time for the recovery!🤔