$BTC and $ETH face a 'liquidity vacuum' following massive derivatives flush

The crypto market is entering mid-February in a state of suspended animation. Despite a modest price recovery toward the end of last week, the underlying market structure remains fragile following one of the most significant deleveraging events in recent months. 🌊

Here is the breakdown of the current market pulse:

🏛️ Fed Watch: Market expectations for a March rate hold have softened slightly to 84.2%. However, this sentiment is on a knife-edge, with all eyes on this week’s high-impact US NFP and CPI data releases to provide a clearer direction.

📉 The Great Flush: Last week saw a staggering 2.9 bln USD in derivatives liquidations, including nearly 2 bln USD in long positions. This massive wipeout of leverage—the largest since October 2025—has effectively 'dried out' the market's immediate momentum.

🏦 ETF Synchronicity: US-listed spot ETFs recorded net outflows of 520 mln USD. With 350 mln USD leaving bitcoin and 170 mln USD leaving ether, it appears institutional sentiment is moving in lockstep across both major assets.

🔄 Whale Activity: Despite the negative price action, the largest whale cohorts (>10 mln USD) moved 14.6k BTC off exchanges. While structurally bullish for supply, exchange balances still remain elevated compared to late 2025 levels.

⚖️ A Market in Limbo: Without a clear positive catalyst to fill the void left by the recent liquidity flush, prices are struggling to find a sustainable trend, even after the 'forced selling' has subsided.

The Bottom Line: We are currently in a directionless 'wait-and-see' phase. The market is cleaner after the liquidation event, but it lacks the fresh capital and conviction needed to spark a meaningful leg up.

Do you think the recent flush has provided a healthy reset, or are we entering a period of prolonged sideways chop?

#bitcoin #ether #fomc #marketanalysis #liquidation

Data sources: Exness FMS, CME Group, Glassnode, CoinGlass