Bitcoin BTC$66,944.44 fell 2.4% in the past 24 hours to around $66,900, while ether ETH$1,950.42 lost 2.7% to trade back below $2,000. The broader CoinDesk 20 (CD20) index dropped 3.7%.

The declines weighed on crypto-related stocks. Coinbase (COIN) dropped about 4% in pre-market trading, while rival exchange Bullish (BLSH), which owns CoinDesk, fell 2.3%. Bitcoin treasury companies Strategy (MSTR) and Strive (ASST) also lost about 2.3%. Trading platform Robinhood (HOOD) fell 4.7% after saying fourth-quarter crypto earnings fell 38%.

Gold prices, in contrast, added around 0.9% to $5,070 an ounce while silver rose over 5% after weaker-than-expected U.S. retail sales data pointed to slowing consumer demand.

The dollar weakened, and Treasury yields fell as investors adjusted their expectations around interest-rate cuts. On Polymarket, odds of a Federal Reserve rate cut in March have risen from 7% to around 19% since the beginning of the month. On Kalshi they’ve reached 21%.

Derivatives Positioning

• Bearish momentum in BTC futures is intensifying, with open interest falling further to $15.6 billion.
• The drop signals an extended deleveraging phase, underscored by funding rates falling deeper into negative territory on Binance (-6%) and Bybit (-0.50%), while a shrinking three-month basis (now at 1.6%) suggests institutional appetite is cooling rapidly.
• The bitcoin options market continues to signal high defensive caution as the one-week 25-delta skew has climbed to 23% even as call dominance remains steady at 55%, implying there's some bottom-fishing going on.
• Despite this localized tension, the implied volatility term structure remains unchanged, maintaining its hybrid state between backwardation and contango as the market balances expensive near-term protection with stabilized long-term volatility expectations.
• Coinglass data shows $297 million in 24-hour liquidations, with a 77-23 split between longs and shorts. BTC ($121 million), ETH ($89 million) and others ($16 million) were the leaders in terms of notional liquidations.
• The Binance liquidation heatmap indicates $66,100 as a core liquidation level to monitor in case of a price drop.

Token Talk

• Spark, the onchain capital allocator incubated by Sky, introduced two new lending products targeting institutional borrowers, a move aimed at bridging the $33 billion offchain crypto lending market with decentralized finance.
• The products, Spark Prime and Spark Institutional Lending, extend the platform's reach beyond decentralized finance-native users.
• Spark Prime allows institutional clients to trade on margin and settle off-exchange while using collateral across both centralized and decentralized platforms.
• Spark Institutional Lending is built for firms that require regulated custody. Through integrations with custodians like Anchorage Digital, institutions can borrow against assets held offchain, tapping into Spark’s onchain markets without moving capital onchain themselves.
• Spark currently manages over $9 billion in stablecoin liquidity across DeFi and holds $5.2 billion in total value locked, per data from DefiLlama.
• Spark native token SPK, whose holders govern through the DAO the allocation and risk envelope for these products, is up more than 2% in the past 24 hours, outperforming the wider market.