Editor's Note

This week, the global crypto asset market witnessed a textbook "liquidity hierarchy collapse." Since Monday 00:00 UTC+8, Bitcoin (BTC) has trended downward from above $77,000, decisively breaking through the $73,000 technical support and briefly touching the sub-$65,000 range on Friday morning. This violent price adjustment is not an isolated event but a confluence of reshaped interest rate expectations, negative Gamma effects in the options market, and a massive deleveraging of on-chain positions. Market sentiment has swiftly pivoted from extreme optimism last month to "extreme fear," with the Fear & Greed Index recording low levels between 5 and 9—a degree of panic not seen since the collapse of FTX in late 2022.

[Personal View] The current market performance confirms that crypto assets occupy the very end of the financial liquidity chain. When precious metals such as gold and silver experience volatility due to macroeconomic shifts, crypto markets are often the first to be liquidated as they are the most liquid and risk-sensitive assets, used to fill margin gaps in traditional portfolios. Bitcoin's drop below the $70,000 psychological threshold triggered defensive hedging by options market makers in negative Gamma zones. This act of selling spot to hedge futures exposure created a self-fulfilling downward spiral in an environment of thin liquidity.

[Personal View] Despite the lackluster spot price action, a clear divergence has emerged between primary market financing logic and secondary market panic. LayerZero and Uniswap secured hundreds of millions of dollars in strategic funding this week, indicating that top-tier venture capital firms are leveraging secondary market liquidity droughts to perform "infrastructure bottom-fishing". This trend of capital clustering toward alpha-tier protocols suggests that institutional recognition of Web3's core value has shifted from simple price action to the underlying efficiency of Omnichain communication and decentralized liquidity. This is a typical industry purge designed to clear excessive speculative leverage and pave the way for next-stage institutional adoption.

[Personal View] From a short-term game theory perspective, the sell-off has entered the early stages of "seller exhaustion." Data from CryptoQuant showing massive realized losses by whale addresses and Bitcoin exchange reserves hitting historic lows point to one reality: while retail is panic-selling, institutional entities with long-term horizons are discreetly accumulating during this window. The critical observation point ahead lies in whether the market can establish a solid technical floor following the US CPI data release, as leverage resets. In an environment where the fear index is in the single digits, historical experience suggests that contrarian opportunities are often born in the deepest layers of despair.

Market Overview

The overall market trended sharply downward this week, influenced by macro liquidity tightening expectations. Most assets recorded double-digit losses, except for a few tokens pegged to traditional safe-haven assets. Bitcoin Dominance rose to 58.3%, reflecting a massive retreat of capital from high-beta altcoins back into core assets amid heightened risk aversion.

Data as of Feb 13, 2026, 15:33 UTC+8. Sources: CoinMarketCap, CoinGlass

Key Indicators:

1. Fear & Greed Index: Recorded at 9 (Extreme Fear). The index hit a record low of 5 earlier this week, signaling a historic panic phase.
2. Network-wide Liquidations: Total liquidations reached $398 million in the past 24 hours. Long positions accounted for $169 million, while shorts accounted for $229 million, reflecting a "double-sided squeeze" in extreme volatility.
3. Stablecoin Dynamics: Total stablecoin market cap rose to $307.38 billion, a weekly increase of +1.85%. USDT maintains absolute dominance at 59.8%, while USDC usage in L2 networks like Base has surged, reflecting institutional risk-mitigation preferences.

Top Stories

1. Bitcoin Breaks Multiple Technical Averages, Beginning Structural Stress Test

Bitcoin's performance was dismal this week, marking its longest losing streak since Feb 1. After breaking below the $73,000 neck-line and the 100/200-day moving averages, BTC prices plummeted toward the $65,000 range. This technical breakdown crushed short-term bull confidence and forced trend-following quant funds to liquidate. Analysts warn that failing to reclaim $68,000 next week could lead to a deeper search for a floor at $60,000 or even $40,000.

2. LayerZero Secures $318M in Strategic Funding to Upgrade Omnichain Narrative

On Feb 11, LayerZero announced a $318.3 million strategic round at an $1.88 billion pre-money valuation. This heavy funding injected much-needed confidence into the infrastructure sector during a week of severe liquidity drought. Led by a16z crypto, YZi Labs, and Delphi Digital, the funds will accelerate the expansion of the Omnichain ecosystem, particularly in cross-chain RWA and stablecoin distribution.

3. Uniswap Completes $177M Strategic Financing, Strengthening Defensive Moat

DeX leader Uniswap announced a $177.9 million funding round on Wednesday, reaching a valuation of $2.96 billion. With participants from across top-tier crypto venture capital, the funds will be used to enhance trading efficiency across multi-chain environments and develop the Hooks ecosystem for v4/v5. Uniswap's resilience as a non-custodial protocol is being re-evaluated by institutions amidst rising regulatory pressure.

4. Hyperliquid's $222M Single Liquidation Shocks the Market

Triggered by an ETH price drop of 17% in a single day, a single trader on Hyperliquid saw an ETH-USD position worth $222.65 million liquidated, marking the "eye of the storm" for the week's liquidations. The event highlighted the high risks of on-chain derivatives during extreme volatility. Hyperliquid handled nearly 40% of the network's liquidations this week, with total forced closures exceeding $1 billion.

5. Trump Media Announces Record Date for Digital Token Distribution

Trump Media (DJT) officially announced Feb 2, 2026, as the record date for its digital token distribution initiative. Shareholders owning the stock will be eligible for digital tokens and associated incentives. Partnering with Crypto.com for minting and custody, this move represents a large-scale attempt by a publicly traded US company to integrate crypto incentives into corporate governance.

6. RWA Sector Proves Resilient with TVL Surpassing $19.2B

Against a backdrop of widespread crypto price declines, the RWA (Real World Asset) sector showed strong defensive attributes. According to DeFiLlama, RWA TVL has grown by $2 billion since the start of 2026, reaching a historic high of $192.31 billion. Tether Gold (XAUT) and Ondo Finance remain dominant, showing that institutions prefer tokenized treasuries and gold products amidst interest rate volatility.

7. Crypto IPO Window Stays Open; Kraken and Ledger in Preparation

Despite the price crash, institutional exit paths remain clear. A Morningstar report indicates that Kraken, Ledger, and Consensys (MetaMask's parent) are all preparing for 2026 IPOs. BitGo's valuation remains at $2.6 billion despite its recent IPO attempt not meeting high expectations. This demonstrates that institutional interest in crypto firms with mature cash flow and compliant infrastructure persists regardless of short-term token volatility.

8. Fed's Jan CPI Data Beats Expectations, Dampening Rate Cut Hopes

The Jan CPI data released on Friday, Feb 13, showed that inflation remains more stubborn than the most optimistic forecasts. With core services prices rising, the market significantly lowered the probability of a March rate cut, with benchmark rates likely staying above 3.85% for longer. This "higher for longer" stance directly accelerated the deleveraging of risk assets, with Bitcoin being the first to feel the pressure of the dollar's retreat.

9. Bitwise Predicts Bitcoin Will Break 4-Year Cycle Law

Bitwise CIO Matt Hougan predicted that with the deepening penetration of spot ETFs, Bitcoin would break its traditional four-year halving cycle. He argued that Bitcoin's volatility in 2026 has dropped to levels similar to tech stocks like NVIDIA, and structural demand is replacing speculative halving narratives. Hougan believes that despite a difficult February, Bitcoin will regain momentum later this year driven by institutional portfolio diversification.

10. Tether Invests $150M for Stake in Gold.com to Boost XAUT Distribution

Stablecoin giant Tether announced a $150 million investment for a 12% stake in Gold.com, aimed at enhancing global distribution and payment penetration of its gold-backed token XAUT. This move solidifies Tether's lead in commodity tokenization and signals a shift in crypto payments toward assets with physical backing to counter fiat credit risks.

Sector Deep Dive

DeFiLlama data this week clearly outlined the "flight to safety" and "speculative contraction" logic. As total network TVL corrected toward the $100 billion mark, three sectors performed critically.

1. RWA (Real World Assets)

RWA was the only sector recording net inflows this week.

• Performance: 7-day TVL grew significantly, with Ondo Finance recording over $2.5 billion in TVL, an 80% monthly increase.
• Core Logic: While BTC fell 10%, assets like XAUT (Tether Gold) and BUIDL (BlackRock Treasury Fund) showed excellent defensiveness. BUIDL saw a 20.53% 7-day TVL increase, reflecting institutional shifts from non-yielding BTC to yield-bearing on-chain financial assets.
• Synergy: Chainlink's activation of real-time price feeds for Ondo's tokenized equities (SPYon, TSLAon) on Feb 11 marks a transition for RWAs from simple holding tools to composable financial components.

2. Infrastructure & Omnichain

This sector received historic levels of capital backing this week.

• Performance: LayerZero's $318M round put the sector at the peak of market focus. While overall TVL fell due to price action, active addresses spiked following the news.
• Core Logic: With the rise of Layer 2s like Base and Arbitrum, liquidity fragmentation has become the core bottleneck for Web3. Omnichain protocols solve this by removing bridging friction. As suggested by Talos's $45M raise this week, institutions prefer "middleware" that bridges traditional markets and digital assets.

3. DEX & Perps

This sector faced a "stress test" this week.

• Performance: Total DEX 7-day volume was ~$74.64 billion, down 34.91% from last week.
• Differentiation: Despite shrinking volume, Uniswap strengthened its defensive moat through funding. Hyperliquid, as an emerging Perp L1, saw its OI stabilize quickly after massive liquidations, reflecting the high activity levels of professional traders during volatility.

On-Chain Highlights

Chain metrics indicate the market has entered deep deleveraging and chip restructuring.

1. MVRV Z-Score Bottoming: The Bitcoin MVRV Z-Score has fallen to 0.42. Historically, a reading below 1.0 suggests the market is in a "fair value" or "undervalued" zone, similar to October 2023 when BTC was at $29,000.
2. Exchange Reserve Outflow: Despite low prices, over 51,000 BTC were withdrawn to cold storage this month. Exchange reserves are at their lowest since Oct 2021, showing long-term investors treat spot as scarce collateral.
3. Negative Gamma Amplification: Dealers holding ~$1.5B in negative gamma between $60k-$75k were forced to sell spot to hedge, amplifying the downside in thin liquidity.
4. Whale Realized Losses: Whale addresses realized ~$3.2B in net losses as BTC fell below $73k. This "painful capitulation" often signals the end of a wash-out.
5. Stablecoin Rotation: USDC dominance on Base has risen to 89.78%, showing a preference for compliant settlement channels.
6. OI Compression: BTC Futures OI fell from $103B to ~$61B following the Feb 12 liquidations, significantly clearing leverage risks.
7. ETH Supply Inflation: Low gas prices (0.05 Gwei) have resulted in a temporary inflationary state for ETH as DeFi activity slowed.
8. LTH Selling Moderates: Long-term holder net position reduction slowed to 170k BTC/day from 245k/day earlier this month, suggesting selling intent is weakening near cost levels.

Funding & Project Updates

5 Important Project Updates

1. Tether Gold (XAUT) on Avalanche: Launched on Feb 13 via OpenXAUT for instant clearing.
2. Stable Mainnet v1.2.0: Optimized T+0 settlement and real-time RWA evaluation.
3. Ripple Prime + Hyperliquid: Integrated institutional on-chain perp access.
4. Ronin L2 Migration: Entered genesis phase for full transition by year-end.
5. LivLive ($LIVE) Presale: Raised >$2.2M for its AR Proof-of-Presence engine.

Regulation & Macro

1. Macro Data: CPI vs. Rate Cut Expectations

The Jan CPI data beat expectations, dampening March rate cut hopes and driving risk assets lower.

2. ETF Dynamics: Consolidation

While ETFs saw a $405M net outflow on Feb 10 , BlackRock's $IBIT$ remained resilient with continued inflows, absorbing panic-sold shares from retail.

3. Global Policy

SEC Chair Paul Atkins warned against "financial surveillance," while South Korea tightened oversight on manipulation.

Chart of the Week

Chart 1: BTC Liquidation Heatmap (7D)

Shows $68,800 as the primary short-liquidation cluster (>$500M).

Short-term Outlook

1. FOMC Minutes (Feb 18): Watch for hawkish cues.
2. ETHDenver (Feb 17-21): Potential L2/AA news to boost sentiment.
3. $260M Token Unlocks: $APT$, $AVAX$, $JUP$ faces pressure.
4. US Retail Sales (Feb 17): Economic resilience check.
5. PCE Price Index (Feb 20): Key inflation indicator.

Closing & CTA

Thanks for reading AscendEX Web3 Weekly

Subscribe for weekly delivery: https://ascendex.com/en/digest

Trade Bitcoin and 800+ cryptocurrencies: https://ascendex.com

This report is for informational purposes only and does not constitute investment advice. Cryptocurrency prices are highly volatile. Invest responsibly. AscendEX assumes no liability for the content of this report.