Which Ring of Hell Have We Entered?
The week brought convergence of disturbing news — Epstein files, AI agents creating independent social media presence, potential Iran conflicts, and market collapse.
Don't Panic!!!
The week brought convergence of disturbing news — Epstein files, AI agents creating independent social media presence, potential Iran conflicts, and market collapse. I had anticipated Bitcoin's movement based on January 30th options expiry; closing above $96.5k would have triggered upside breakout, while below $90k meant maximum pain. Markets disappointed.
Saturday proved catastrophic. Bitcoin tumbled from $90k Wednesday to $75k Saturday — cascading liquidations resembling descent through Dante's circles of Hell, "but with fewer poets and more margin calls."
Support Levels Identified:
- $90k: Max pain anchor held
- $84k: Local support breached
- $75k: Current floor being tested
- $69,000: Critical level; breach means "imploding" rather than correcting
- $60,000-$65,000: "Weekly Demand Zone" where buyers might reappear
- $45,000: Capitulation level representing 70% crash from highs
Liquidation Events
Over 400,000+ traders liquidated in a single day:
- Ethereum: ~$1-$1.14 billion (including $222-$223 million single position on Hyperliquid)
- Bitcoin: ~$700-$780 million
Historical Comparison:
- Covid: $1.2 billion
- May 2021 correction: $2.4 billion
- FTX (November 2022): $1.6 billion
- 10/10 crash: $19 billion
- 1/31/26: $2.5 billion
Legislative Development
Senate Agriculture Committee passed CLARITY market structure legislation 12-11, with all Democrats voting against it. This represents essential financial system framework transcending partisan lines.
The "10/10 Epstein Files" of Crypto
Multiple theories emerged regarding October 10th crash causes:
Binance's Position: Macro triggers activated, affecting market makers and causing network congestion (full report available)
Star (OKX CEO): Irresponsible marketing campaigns by Binance and Ethena, specifically USDe incentives on Binance
Haseeb: Rejects USDe as primary cause; notes depeg occurred only on Binance 30 minutes after Bitcoin collapse. Trump's Friday evening tariff threats spooked markets; crypto became only tradeable asset
Dave W: "Momentum ignition" operates intentionally, suggesting deliberate market manipulation
Community Commentary
CZ (Binance) recently promoted Bitcoin supercycle but now turning bearish. I have conviction that Binance and Wintermute manipulate markets long-term, yet simultaneously critique crypto Twitter culture for spreading FUD whenever markets decline. We need to improve community discourse and eliminate "poison pens."
Project Updates
Solana (Toly): On Impact Theory, discussed immutability: "Our ultimate goal is that as soon as you see that signal, you can submit a transaction and its ordering becomes immutable in that moment."
Kraken: Launched DeFi Earn (powered by Veda Labs, Sentora, Chaos Labs), offering up to 8% APY directly within application, eliminating need to leave platform for DeFi yields.
Step Finance: Security breach drained approximately $30 million from treasury wallets.
Sunrise: Continuing Solana expansion, introducing HYPE (Hyperliquid), Mantle, and INX (Infinex) for native trading.
Moonbirds: Token generation event claiming on January 29th proved disastrous due to bandwidth limitations; site required password protection. Each SBT worth 11 BIRB (~$2-3). Claim functionality remained problematic; workaround required claiming individual qualified wallets separately.
Tether: Announced USA₮ launch — federally regulated, dollar-backed stablecoin manufactured in America. Question raised regarding market share potential against USDC given $USDT's 2.5x larger market cap and dominance outside USA.
Jupiter Updates
Jupiter CATLUMPURR event generated announcements:
Jupiter Global: Real-world onchain payments globally; QR Pay enables scan-to-pay across APAC merchants and friends with zero fees, immediate settlement on local rails
Polymarket Integration: Integrated into Jupiter despite earlier Kalshi integration; Polymarket dominates Kalshi's sports-focused activity
ASR Claims: Final season claims now available but exclusively through Jupiter wallet with mandatory staking upon claim. I criticized forced wallet migration; Weremeow (founder) promised multi-wallet functionality within one-two weeks
Struggling Positions
Tom Lee (Fundstrat) Bitmine ($BMNR) Ethereum holdings down over $5.5 billion following his January prediction of $ETH exceeding $7,000. MicroStrategy ($MSTR) Bitcoin average acquisition price $76K. Circumstances deteriorating.
Consumer Opportunity
Seeker phone (Solana Mobile) available at 50% discount when purchasing with $SKR token. DeFi the System app version 1.2 available through dapp store.
Try to slow down and take some deep breaths this week. Stay Free • Ebullition
