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South Korean regulators have announced an inspection of local crypto exchanges and improved measures to address regulatory “blind spots” following Bithumb’s $40 billion Bitcoin (BTC) payment error.

New Task Force To Review Crypto Exchanges’ Practices

On Monday, South Korean financial authorities announced they will step up their efforts to regulate the crypto industry and foster a trustworthy trading environment for digital assets, local news outlets reported.

Following the “ghost Bitcoin” incident at Bithumb, South Korea’s second-largest cryptocurrency exchange, the Financial Supervisory Service (FSS)’s Governor Lee Chan-jin revealed an inspection of local exchanges and emphasized the need for improved legislation.

As reported by Bitcoinist, Bithumb accidentally distributed 620,000 Bitcoin, worth over $40 billion, to 249 users participating in the exchange’s “random box” promotional event due to an employee’s mistake.

Although 99% of the BTC were recovered, the incident raised serious concerns about the crypto exchange’s internal controls. Notably, Bithumb held 175 BTC in its own books, and less than 50,000 Bitcoin between its own assets and customer-held assets, according to a regulatory filing from last year.

This means that the exchange’s system failed to block the irregular transaction, distributing assets that did not actually exist to users and distorting market prices.

“The so-called ghost Bitcoin incident clearly revealed that, beyond a mere input error, there are structural weaknesses in internal controls and ledger management systems of cryptocurrency exchanges,” said Kim Jiho, a spokesperson for the ruling Democratic Party, in a Saturday briefing.

Meanwhile, the FSS Governor affirmed that the “incident bluntly exposed the structural flaws in virtual asset trading systems,” adding, “There are many aspects of the case that we view as extremely serious.”

As a result, the FSS, alongside the Korean Financial Intelligence Unit (KoFIU), the Financial Supervisory Service (FSS), and the Digital Asset eXchange Alliance (DAXA), formed an emergency task force to organize follow-up measures and review industrywide practices.

The reports noted that the task force plans to examine Bithumb and other domestic exchanges’ virtual asset reserves, management practices, operational conditions, and internal control systems.

“We will carry out planned investigations into major high-risk areas in the virtual asset market where unfair trading practices, such as market manipulation and the dissemination of false information, are a concern,” Lee stated.

Regulators To Address ‘Structural Vulnerabilities’

The FSS Governor also warned that the process could be escalated into a full investigation if any illegal activities are revealed, adding that the incident would be reflected in the long-awaited Second Phase of the Virtual Asset User Protection Act, which is expected to serve as a comprehensive framework for the entire industry.

“While we are drawing up the second phase of virtual asset legislation, measures to address structural vulnerabilities at exchanges, exposed by the recent Bithumb incident, will be reflected,” Lee declared.

“As virtual assets are being incorporated into the legacy financial system, there remains the task of strengthening the regulatory and supervisory framework. This could serve as an opportunity to put the system in place properly,” he continued.

It’s worth noting that South Korean financial authorities are reportedly considering introducing a system to prevent suspects from hiding or withdrawing unrealized profits from market manipulation related to crypto assets.

The Financial Services Commission (FSC) revealed last month that it is exploring the proposal for prosecution measures against suspects of crypto asset price manipulation, as some officials consider that there’s a need “to complement the current Virtual Asset User Protection Act by implementing measures for the confiscation of criminal proceeds or the preservation of recovery funds in advance.”

The measure would limit fund outflows, such as withdrawals, transfers, and payments from a crypto-related account suspected of obtaining illicit gains through typical market manipulation tactics.

On-chain data shows Bitcoin buyers from 2025 and 2026 realized $1.5 billion in losses per day on the recent move down in the cryptocurrency.

Bitcoin Net Realised Profit/Loss Has Plunged Recently

In a new post on X, on-chain analyst Checkmate has talked about how loss-taking has looked during the latest Bitcoin price crash. The indicator cited by Checkmate is the “Net Realised Profit/Loss,” which measures the net amount of profit or loss that investors are realizing through their transactions.

The metric works by going through the transaction history of each coin being sold to see what price it was moved at prior to this. If the last selling price was greater than the latest spot price for any token, then that particular coin is now being moved at a net loss. On the other hand, the previous selling price being less suggests the sale is leading to profit realization.

In each case, the degree of profit/loss involved is equal to the difference between the two prices. The Net Realised Profit/Loss sums up this value for both types of sales and then finds their net value.

When the value of the indicator is greater than zero, it means the investors are selling their coins at a net profit. Similarly, it being negative implies loss-taking is the dominant mode of selling.

Now, here is the chart for the Ethereum Net Realised Profit/Loss shared by Checkmate that shows the trend in its 7-day exponential moving average (EMA) value separately for buyers from different years:

As displayed in the above graph, the Ethereum Net Realised Profit/Loss fell into the negative zone for the 2025 and 2026 buyers as the market crash took place. This suggests that buyers from the past year participated in loss realization.

“Class of 2025 and 2026 collectively puked out $1.5B/day in losses on the move lower, equivalent to the June 2022 low at $17.6k,” noted the analyst. Buyers from other years also participated in selling during the drawdown, but their distribution mostly involved profit-taking.

In related news, the unrealized loss in the market has also hit a value similar to that witnessed during the 2022 bear market, as on-chain analytics firm Glassnode has pointed out in an X post.

From the chart, it’s visible that the Relative Unrealized Loss, an indicator representing the unrealized Bitcoin loss as a percentage of the market cap, has risen to 16% recently. “Current market pain echoes a similar structure seen in early May 2022,” explained Glassnode.

BTC Price

At the time of writing, Bitcoin is trading around $69,300, down more than 11% over the past week.

Federal Reserve (Fed) Governor Christopher Waller said on Monday that progress on the long‑anticipated crypto market structure legislation, commonly referred to as the CLARITY Act, appears to have stalled in Congress. 

His remarks come as lawmakers remain divided over key issues, most notably stablecoin yield provisions and the Federal Reserve’s proposal for so‑called “skinny” master accounts, a topic earlier highlighted by Crypto In America.

Stablecoin Yield Fight Fuels CLARITY Act Stalemate

Waller’s comments quickly drew reaction from market observers. Crypto analyst MartyParty noted on X that the governor’s assessment reflects the ongoing deadlock surrounding the CLARITY Act.

According to MartyParty, the delay is not accidental. He argued that resistance from the banking sector has intensified, particularly around the treatment of stablecoin yields and rewards. 

At the center of the dispute is whether crypto platforms such as exchanges and digital wallets should be allowed to offer interest‑like returns or incentives on stablecoins held by users.

Crypto industry advocates contend that yield‑bearing stablecoins encourage adoption, improve efficiency, and increase competition in the payments market. Banking groups, however, strongly oppose this view. 

They argue that stablecoin yields pose a direct challenge to traditional bank deposits, warning that higher returns—often in the range of 3% to 5% or more, compared with near‑zero yields on many bank accounts—could trigger massive deposit outflows. 

In MartyParty’s assessment, banks are concerned that passage of the CLARITY Act could move trillions of dollars onto crypto‑based payment rails, breaking what he described as the banking sector’s “closed‑loop system” and putting pressure on long‑established profit models.

Crypto And Banks Head Back To White House  

Amid rising tensions, MartyParty also reported that the White House has scheduled a second meeting for Tuesday, February 10, aimed at easing friction between cryptocurrency firms and banks over stablecoin yield payments. 

The meeting is expected to include senior policy officials rather than company chief executives, along with representatives from banking and crypto trade associations.

Another major point of contention is the Federal Reserve’s proposed “skinny” master account model. Under this framework, eligible fintech and crypto firms would be granted limited access to the Fed’s payment systems without receiving full banking privileges.

The debate around skinny accounts became especially clear through 44 comment letters submitted to the Federal Reserve. Crypto firms and industry groups generally expressed support, while banking organizations responded with caution or outright opposition. 

Banking groups raised concerns about oversight and risk. The American Bankers Association (ABA) warned that many entities likely to qualify for payment accounts lack a long‑term supervisory track record and are not subject to consistent federal safety standards. 

Governor Waller indicated that he hopes the Federal Reserve will be able to publish proposed regulations for skinny master accounts in the fourth quarter of this year.

Featured image from OpenArt, chart from TradingView.com 

Bitcoin is struggling to hold the $70,000 level as the market shows clear signs of weakening demand following weeks of sustained selling pressure. After several failed recovery attempts, price action continues to reflect fragile sentiment, with liquidity thinning and volatility increasing. Investors remain cautious as macro uncertainty, declining risk appetite, and persistent outflows from speculative assets weigh on the broader crypto market.

A recent analysis from Axel Adler indicates that the bear market underway since November 2025 has entered a deeper phase following last Friday’s sharp decline, which pushed total drawdown to roughly 46% from the cycle peak. This magnitude of correction historically marks a transition from an early pullback into a more mature bearish stage, where sentiment typically deteriorates further before stabilization occurs.

The report highlights that Bitcoin has approached the 1.25× Realized Price Band, a historically significant level that often separates standard corrections from capitulation phases. When price tests this boundary, market structure tends to become highly sensitive to liquidity shifts and investor positioning.

Whether Bitcoin can hold above this zone will likely determine the short-term direction. A sustained breakdown could signal deeper capitulation dynamics, while stabilization may provide the foundation for eventual accumulation.

Bear Market Drawdown Signals Transition Into Deeper Phase

Adler notes that the Bitcoin Bear Market Correction Drawdowns chart places the current 2025–2026 decline in historical context, comparing its magnitude with previous bear cycles. The metric tracks percentage drawdowns from each cycle’s all-time high on a logarithmic scale, allowing a clearer assessment of structural market stress rather than nominal price moves alone.

The current bear phase began after Bitcoin topped near $124,450 in October 2025. By November, the market had entered a persistent downtrend, with the correction expanding from roughly −20% to −30% initially before accelerating to around −46% by early February. Notably, the pace intensified sharply: the drawdown moved from approximately −28% on January 28 to −46% by February 6. A modest rebound followed, with price briefly stabilizing near $70,700, still implying a drawdown of roughly −43%.

Historically, earlier cycles saw significantly deeper declines, including roughly −93% in 2011, around −83% in both the 2013–2015 and 2017–2018 bear markets, and about −76% during the 2021–2022 correction. Against that backdrop, the current decline appears less severe so far.

Adler argues that three months of persistent downside momentum signal entry into a deeper corrective phase. Stabilization between −40% and −50% would suggest moderating cycle volatility, while a drop beyond −50% could reopen downside targets toward the −60% to −70% range.

Bitcoin Tests Critical Support As Downtrend Pressure Intensifies

Bitcoin’s latest price action shows a clear deterioration in market structure after the sharp breakdown toward the $65K–$70K region. The chart highlights a decisive loss of short-term support, followed by an aggressive selloff that pushed price well below the key moving averages, signaling sustained bearish momentum rather than a simple correction.

Notably, BTC is trading under the 50-, 100-, and 200-period moving averages, all of which are beginning to slope downward. This alignment typically reflects a transition from consolidation into a more established downtrend. The rejection near the mid-$90K area earlier in the cycle appears to have confirmed a lower high, reinforcing bearish continuation risk.

Volume dynamics also deserve attention. The sharp spike during the most recent drop suggests forced selling, likely driven by liquidations and panic positioning. Historically, such spikes can either mark capitulation or precede further downside if follow-through selling emerges.

From a structural perspective, the $65K zone is now critical. Holding above it could allow stabilization and a potential relief bounce. However, a sustained breakdown below this level would likely expose the next demand region closer to the low-$60K range, where stronger historical support may emerge.

Featured image from ChatGPT, chart from TradingView.com 

After one of its sharpest swings in over a year, Bitcoin (BTC) is attempting to find balance. Prices have stabilized above $70,000 following a rapid drop to $60,000 last week, but the calm has done little to settle the broader debate; is this a completed reset, or just a pause before another move lower?

The recent volatility has flushed out leverage, forced large players to cut risk, and shifted sentiment from optimism to caution. While dip buyers have returned, on-chain data, derivatives metrics, and macro signals suggest the market remains in a fragile holding pattern rather than a clear recovery.

Whales Step Back as Leverage Unwinds

One of the clearest signs of the reset came from whale activity. On-chain data shows that the so-called Hyperunit whale sold more than $340 million in Bitcoin, sending the funds to Binance after months of aggressive, leveraged trading across crypto markets. The move followed a major liquidation on a large Ethereum position, which reportedly resulted in losses of roughly $250 million.

At its peak, the wallet held over $11 billion in Bitcoin. Holdings have since fallen to about $2.2 billion, signaling a shift away from expansion toward capital preservation.

The selling coincided with a broader decline in Bitcoin open interest, which fell from around $61 billion to near $49 billion, pointing to widespread deleveraging rather than fresh short positioning.

This reduction in leverage has eased immediate downside pressure but has also reduced momentum, leaving Bitcoin without strong directional conviction.

Bitcoin Price Stabilizes, But Signals Remain Mixed

Bitcoin was trading around $70,000–$71,000 in Asian hours on Monday, holding steady after last week’s rapid rebound. Technical indicators still show weak momentum, with subdued volume and no clear signs of either buyers or sellers being firmly in control.

Market participants are split. Some analysts argue that the recent washout has removed excess risk and created conditions for a healthier base. Others warn that similar rebounds in this cycle have turned into bull traps, especially when driven by short-term traders rather than long-term accumulation.

Support near $60,000 remains a key level to watch, while resistance between $73,000 and $75,000 is seen as a test for any sustained upside.

Macro, Sentiment, and Structural Questions

Beyond price action, broader factors are shaping the debate. Global equity markets rebounded, helping risk assets stabilize, while US spot Bitcoin ETFs recorded modest inflows as investors selectively bought the dip.

At the same time, concerns around long-term narratives, from Bitcoin’s safe-haven role to emerging discussions about quantum computing risks, continue to hover in the background.

Bitcoin’s ability to hold above $70,000 suggests the forced reset may be largely complete. Whether that turns into a durable recovery or another leg lower will depend on liquidity, conviction from larger players, and how markets respond to upcoming macro data.

Cover image from ChatGPT, BTCUSD chart on Tradingview