TL;DR

• BTC is down & ETH is down

• BTC over-performed ETH this week 

• Bitcoin dominance is up

• The hot coin we look at this week is $VVV

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BTC & ETH Market Update 📈

Crypto is down this week, with BTC up by 6.1% and ETH down by 21.6%:

Bitcoin dominance has increased over the week, starting from 55.5% to a high of 59.61% and ending at 59.0%. Investor sentiment, regulatory changes, technological advancements, and the overall growth of the cryptocurrency sector shape Bitcoin's market dominance. Its reputation as "digital gold" also enhances its position, making it a key player in the market.

It’s going to be interesting to see whether this trend will continue in the short term, as capital in crypto tends to flow initially to BTC and then further out on the risk-curve, starting with altcoins like ETH and then into mid- or low-cap coins.

The cryptocurrency market is facing a sharp correction, with total market capitalization dropping over 2.5% to around $3.15 trillion. Bitcoin is trading near $96,400, while Ethereum has led the downturn, losing 5% in the past 24 hours to fall below $2,700.

Other major assets, including Solana, Dogecoin, and Cardano, have also posted steep declines, reflecting widespread risk aversion ahead of key U.S. economic data.

One of the primary drivers of the market downturn is liquidations. Over $250 million worth of leveraged positions have been wiped out in the past 24 hours, with Ethereum long positions accounting for $32.75 million in losses. The dominance of long liquidations suggests the market was overleveraged, making it vulnerable to rapid declines.

Macroeconomic uncertainty is also weighing on sentiment. Investors are closely watching the upcoming U.S. jobs report, which could impact Federal Reserve policy.

A stronger-than-expected report may delay anticipated rate cuts, tightening financial conditions and dampening appetite for risk assets like Bitcoin. Market expectations currently place an 85.5% probability on the Fed keeping rates steady in March, with the first cut likely in June.

Technical indicators point to a potential breakdown in the broader market structure. The TOTAL index, which tracks the total crypto market cap, is testing a key support level at $3.11 trillion.

A sustained drop below this level could trigger a retest of the 50-day moving average near $2.55 trillion, with further downside potential toward $2.25 trillion if selling pressure intensifies.

Despite the bearish conditions, some analysts view this correction as a strategic buying opportunity. The Fear and Greed Index has plunged to 35, signaling high levels of fear, a zone that has historically preceded market recoveries.

However, near-term risks remain, with the Federal Reserve’s stance, broader stock market performance, and potential geopolitical tensions playing a crucial role in determining Bitcoin’s next move.

Ethereum (ETHUSD) Analysis:

As of February 7, 2025, Ethereum is trading at $2,722.25, having broken below its rising trend channel, indicating a slowdown in upward momentum. The price recently met the $3,153 target from an inverse head-and-shoulders formation before declining. Immediate support is at $2,240, while resistance stands at $2,900. Volume trends remain weak, with high selling pressure at price bottoms, suggesting caution in the short term.

Bitcoin (BTCUSD) Analysis:

As of February 7, 2025, Bitcoin (BTC) is trading at $97,467, down 0.19% on the day. The short-term outlook is slightly bearish, with support at $92,600 and resistance at $101,400. A breakdown below support could trigger further downside. In the medium term, Bitcoin remains slightly positive, with key levels at $92,000 (support) and $105,000 (resistance). The long-term trend remains bullish, with support at $72,000 and no clear resistance, indicating potential for further gains.

Expected Trading Ranges:

• Ethereum (ETH): Support at $2,240, Resistance: $2,900.

• Bitcoin (BTC): Support at $92,600; Resistance at $101,400.

Market Outlook:

Bitcoin’s outlook remains uncertain as macroeconomic factors weigh on risk assets. The upcoming U.S. jobs report could impact Fed policy expectations, influencing Bitcoin’s price action. Key support sits near $96,800, with a break lower risking a dip to $95,000. Resistance at $100,000 remains a hurdle. Institutional demand and ETF inflows support long-term growth, but short-term volatility persists amid liquidation risks and market caution.

BTC/ETH ratio has seen an increase:

Over the past six days, the BTC to ETH exchange rate has seen a general increase, rising from 32.15 ETH on February 1 to 36.74 ETH on February 8. This marks an overall gain of 14.3%, despite some daily fluctuations, including a 3.22% drop on February 5. The trend has been largely upward, with notable surges on February 2 (+6.28%) and February 6 (+3.96%), indicating stronger Ethereum performance relative to Bitcoin over the week.

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Hot Coin: $VVV🔥

In this week’s newsletter, we dive into Venice’s token with the ticker: $VVV.

The price action and volume have been growing consistently and don’t seem to stop any time soon:

What is the project about?

Venice is a generative AI platform designed to offer private, permissionless, and censorship-free access to AI-powered tools. It enables users to search for information, analyze documents, engage in dynamic conversations, and generate images without restrictions.

With no downloads, installations, or mandatory accounts for basic use, Venice prioritizes accessibility and user control. Unlike other AI services, it does not track user activity or impose content limitations, ensuring a frictionless and privacy-first experience.

Why is the project exciting now?

There are four main reasons why we feature this project in this week’s newsletter:

• Rising Demand for Decentralized AI

• Strong Tokenomics and Staking Rewards

• Expanding Exchange Listings

• Community-Driven Governance and Growth

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