1. Macroeconomic Perspective
In February 2025, the US macroeconomy faces multiple challenges: inflation has not effectively declined, structural problems in the labor market have intensified, economic growth has slowed, but some sectors still perform strongly. The Federal Reserve faces the decision of whether to continue cutting interest rates, and the risk of volatility in the capital market is gradually rising. As macroeconomic risks escalate, the future policy direction will be more uncertain, and changes in economic data need to be closely monitored.
1. Monetary Policy
Unexpected rebound in January inflation: CPI rose to 3.0% year-on-year (market expectation 2.9%), core CPI rose to 3.3% year-on-year (expectation 3.1%), and the month-on-month growth rate was the highest since May 2023. Although the FOMC statement pointed out that "the path of inflation returning to the 2% target has not been fundamentally disrupted", Powell's speech on February 11 conveyed a cautious signal, clearly stating that "policy adjustments will depend on inflation and economic data in the next three months". The first rate cut is expected to be delayed to June, three months later than the beginning of the year.
2. Labor Market
Non-farm employment increased by 143,000 in January (expected 175,000), a three-month low, but the data for the previous two months was revised up by 100,000, indicating that the labor market still has resilience. The unemployment rate fell slightly to 4.0% (expected 4.1%), and the labor force participation rate remained stable at 62.5%, indicating that the pull effect of wage growth on labor supply has weakened. Industry differentiation is obvious: education and healthcare (+54,000) and construction (+36,000) contributed the main increments, while retail (-12,000) and manufacturing (-8,000) continued to contract. Wage growth was 4.2% year-on-year and 0.3% month-on-month, and wage pressure in the service industry still exists.
3. Inflation
CPI rose to 3.0% year-on-year in January, and core CPI rose to 3.3% year-on-year, with month-on-month increases of 0.5% and 0.4% respectively, significantly exceeding market expectations. Service prices have become the main driver: owner's equivalent rent (OER) rose 0.4% month-on-month, and the increases in healthcare (+0.6%) and entertainment services (+0.9%) expanded. The divergence between PPI and CPI has intensified, with PPI down 2.3% year-on-year in January, and the transmission of energy costs has lagged, leading to a contraction in manufacturing profit margins to 4.1% (the lowest in nearly three years).
4. Capital Market
In February, the US stock market showed significant differentiation: the Nasdaq rose 4.2% for the month, reaching a new high of 19,945.64 points; the S&P 500 rose 1.8%, and the Dow Jones rose 0.6%. Tech stocks continued to dominate the market, with Nvidia's monthly gain reaching 17%, and the "Big Tech Seven" (Meta, Google, etc.) reporting 33%-52% year-on-year growth in Q4 net profits, driven by AI computing power demand and the recovery of advertising business. In terms of market sentiment, the VIX index fell to 14.7, and the call option positions in the tech sector surged 23%. However, after the release of non-farm and CPI data, the daily volatility of the S&P 500 expanded to 1.5%, indicating an increase in policy sensitivity.
5. Economic Outlook
The US economy is showing characteristics of stagflation, with a rebound in inflation and a slowdown in growth: the Markit manufacturing PMI preliminary value for February was 51.6 (expected 51.4), expanding for two consecutive months, with the new orders index rising to 53.1, indicating the start of an inventory replenishment cycle; however, the services PMI preliminary value was 49.7 (expected 53), falling below the boom-bust line for the first time, and the employment index plummeted to 48.3. The bond market reflects heightened stagflation concerns, with the 10-year US Treasury yield falling 8 basis points to 4.42% for the month, but spiking to 4.63% after the CPI release, and the 30-year real yield turning negative, with the term spread expanding to 17 basis points. At the policy level, the Federal Reserve faces a dilemma: an early rate cut could strengthen inflation expectations, but maintaining high interest rates will suppress consumption and manufacturing investment. Retail sales grew only 0.1% month-on-month in January (expected 0.3%), indicating economic weakness. If the CPI in March does not decline, the adjustment pressure on risk assets may be further released.
2. Overview of the Crypto Market
Cryptocurrency Data Analysis
Trading Volume & Daily Growth Rate
According to CoinGecko data, as of February 26, the crypto market trading volume has remained sluggish over the past month, with a daily average of $146.5 billion, down 17% from the previous week. On February 4, as the Asian Lunar New Year holiday was coming to an end, liquidity in the Asian market temporarily rebounded, driving the daily trading volume to spike to $440.9 billion, but this growth did not reverse the overall liquidity depletion in the market, and the trading volume has since remained at a relatively low level.
Total Market Cap & Daily Growth
According to CoinGecko data, as of February 26, the total cryptocurrency market capitalization was $3.03 trillion, down 18% from the previous month. Among them, BTC's market share is 59.8%, and ETH's market share is 9.9%, falling below 10%.
Hot New Tokens in February
Among the hot new tokens launched in February, the market's focus has gradually shifted to ecosystem projects, especially those with VC tokens. In terms of market performance, new projects such as PI, KAITO, and IP (Story) have received widespread attention, and their token prices have shown varying degrees of increase; while the Berachain project is mainly reflected in the steady growth of TVL, and its token price has been in a sideways consolidation.
3. On-chain Data Analysis
3.1 Analysis of BTC and ETH ETF Inflows and Outflows
BTC ETF Outflows of $8.86 Billion in February
In February, the market focused on the impact of the Trump administration's tariff policy on the global trade pattern, coupled with the Bybit exchange hack incident that resulted in the theft of $1.5 billion in Ethereum, causing certain negative sentiment, and the prices of the two major cryptocurrencies BTC and ETH experienced significant corrections. As of February 25, the BTC price fell from $105,064 at the beginning of the month to $91,870, a decline of about -12.5%. In February, BTC ETF saw outflows, with a total outflow of $8.86 billion. Combining the factors of the BTC price decline, the total holdings value of BTC ETFs decreased by -7.4% compared to January.
ETH ETF Outflows of $2.1 Billion in February
In February, Altcoins led by Ethereum continued to experience significant corrections, facing a more severe situation. The Bybit hack incident (the stolen assets were all ETH) further stimulated the decline in Ethereum prices. As of February 25, the ETH price fell from $3,426 at the beginning of the month to $2,492, a decline of -27.2%. In February, ETH ETF saw outflows, with a total outflow of about $2.1 billion, and the total holdings value of ETH ETFs decreased by -2.97% compared to January.
3.2 Stablecoin Inflows and Outflows Analysis
Stablecoin Inflows of About $7.56 Billion in February - Mainly Inflows to USDC, USDT, and DAI
In February, although the macroeconomic and cryptocurrency markets both experienced significant negative factors, the stablecoin market continued to maintain strong growth momentum. Among them, USDC has become the main driver of growth this month, with its circulating supply increasing by about $3.63 billion, accounting for an important share of the stablecoin market expansion. In addition, the total circulating supply of PYUSD increased from $480 million to $770 million, an increase of about 60.51%.
4. Price Analysis of Major Cryptocurrencies
4.1 BTC Price Change Analysis
Here is the English translation of the text, with the terms in <> retained as is:The Bitcoin market is facing the resonance pressure of multi-cycle technical signals, and the price has continued to weaken after breaking below $90,000, with the daily chart confirming a break below the upward channel formed since November 2023, which has now turned into a short-term resistance zone ($88,000-$89,200). The weekly chart shows a more severe trend disruption, with the price closing below the Bollinger Band middle line ($92,300) for two consecutive weeks, indicating a significant weakening of medium-term momentum. On-chain trading volume distribution shows that the $86,000-$89,000 range has accumulated about 530,000 BTC in historical turnover, forming a dense selling pressure area, while the 200-day exponential moving average (EMA) at $75,200 and the 50-week moving average at $78,500 form a double support, and the current price has tested the $75,800-$76,200 area three times, which, if accompanied by trading volume, may trigger a short-term rebound. However, the weekly MACD histogram is still below the zero axis and expanding, and although the daily RSI (14) is showing a bottom divergence pattern around 38, the 38.2% Fibonacci retracement level ($71,800) on the monthly chart remains a key long-term defense line, and a break below it could trigger a deeper correction.
4.2 ETH Price Change Analysis
The technical aspect of Ethereum is showing typical weak linkage characteristics, with the ETH/BTC exchange rate accelerating towards the 0.043 support after breaking below 0.048, hitting a new low since June 2022. In terms of independent price, the $2,850 key level is facing severe testing, as it is both the support of the 2023 uptrend line extension and overlaps with the $18.7 million ETH holding cost zone, and if the daily closing price remains below this level, it may trigger passive deleveraging of staked positions. In terms of technical formation, the downward breakout of the daily symmetrical triangle pattern suggests a theoretical measurement target of $2,200, while the 30-day historical volatility has dropped to 42% (the lowest since October 2023), implying that the market is about to face a directional choice. The derivatives market is showing signs of divergence: although the spot price is falling, the ETH quarterly futures are still maintaining a 5% annualized positive basis, indicating that some capital is positioning long-term positions at low levels. In addition, the recent theft incident at the Bybit exchange, although not directly affecting ETH on-chain assets, has raised market concerns about the reserve of centralized exchanges, and some investors have chosen to sell ETH spot to avoid risks, further exacerbating short-term selling pressure.
4.3 SOL Price Change Analysis
Solana's price fluctuations have shown obvious liquidity squeeze characteristics, with the current $135 price level in a high-risk area. On the technical side, the 4-hour chart has formed a "descending flag" structure, and the fate of the $130 neckline has become crucial, as an effective break below it may open up downside space to $98-$103 (corresponding to the Fibonacci 50% retracement level). On-chain data shows that whale addresses holding more than 100,000 SOL have reduced their holdings by 4.2% in the past 30 days, forming a superimposed effect with the 2.3% flow unlocking (about 36.7 million SOL) initiated on March 1. Among them, the Melania and Libra associated wallets were monitored to transfer 2.4 million SOL to the exchange in a single day, triggering market concerns about the systematic withdrawal of liquidity by institutions.
5. Key Events This Month
5.1 Argentine President's Meme Coin Crash, MEME Liquidity Harvested Again
On February 15, 2025, Argentine President Javier Milei announced the launch of a Meme coin called LIBRA on his official X account and published the related contract address. He claimed that the purpose of issuing LIBRA was for national financing, aimed at promoting the revival of the Argentine economy, especially supporting small businesses and entrepreneurial projects.
As soon as the news was out, LIBRA's market cap soared rapidly. Within just forty minutes, its market cap surged from zero to $4.5 billion, with the coin price skyrocketing from $0.12 to $4.61, a staggering 3741% increase. However, this surge did not last long. Within a few hours of reaching a market cap of $4.5 billion, due to massive insider cashing out, the coin price crashed, with the market cap plummeting by more than 80% from $4.5 billion to $257 million, causing huge losses to investors. Subsequently, Milei deleted his previous tweets about LIBRA and posted that he did not understand the specific details of the project at the time. After further investigation, he decided not to continue promoting the project. This move led to a collapse of market confidence in LIBRA, causing its price to continue to decline. As of February 25, LIBRA's market cap was only $32 million.
The LIBRA incident not only had a huge impact on the Meme coin market, but also triggered widespread legal and political controversies. Several lawyers filed criminal fraud charges against Milei, and the opposition also demanded his impeachment trial. In addition, some media and experts pointed out that there were suspicions of insider trading and money laundering behind the issuance of LIBRA, further exacerbating public doubts about the project. The LIBRA incident has significantly undermined market confidence in Meme coins, and new Meme coins are emerging almost daily, but these new coins are often accompanied by hype and dumping, which is also one of the reasons for the continued decline in SOL prices.
5.2 Solana Price Plummets, Ecosystem Affected by Multiple Negative News
As of February 25, the price of SOL has dropped from $230 at the beginning of the month to $134, a decrease of about -41% year-on-year. The main reasons for this phenomenon are that the Solana ecosystem has been affected by multiple negative events recently, including the LIBRA black swan, the unlocking of SOL auction tokens, and the establishment of an AMM by Pump.Fun leading to increased internal strife in the ecosystem.
LIBRA's black swan has become the last straw that overwhelmed the MEME track, causing a large number of investors to lose confidence in MEME and increasing the selling pressure on SOL.
On March 1, the 11.2 million SOL auctioned off by FTX will be unlocked, worth $2.06 billion, accounting for about 2.29% of the current SOL circulating supply. The massive selling pressure, combined with the sluggish market sentiment, has led to further declines in SOL prices.
Pump.Fun is about to launch its own AMM liquidity pool, which is undoubtedly a major positive news for Pump.Fun, but at the same time it also means that it will break away from the dependence on Raydium and Jupiter. As soon as the news came out, the prices of RAY and JUP plummeted. In the long run, strengthening internal competition can diversify the projects in the ecosystem, but in the current situation of continued decline in SOL prices, the internal competition may further exacerbate the market's panic sentiment.
5.3 CZ Steps In to Drive Traffic, BNB Chain Becomes the New Market Hotspot
In February, when the Solana MEME track was in chaos, CZ personally stepped in to drive traffic to the BNB Chain by tweeting, making BNB Chain a rising star and one of the core MEME trading public chains in the market.
TST: On February 6, CZ tweeted that the BNB Chain team's test token TST was being hyped by KOLs, pointing out that the token was not issued by the team and they did not hold the token, and attached a link to buy the token, whose market cap once exceeded $50 million. On February 9, CZ tweeted again that the TST Twitter and LOGO were not officially approved by Binance, and did not belong to the Binance-related team, but the market trading heat continued unabated. Subsequently, CZ announced that Binance would list TST spot and contract, and the TST market cap soared to $480 million, with the market sentiment high.
BNB Ecosystem Upgrade Expectations: On February 11, CZ said it was time for BNB Chain to break free from its constraints, and on the 12th he announced the 2025 ecosystem building goals, enhancing market expectations for the BNB ecosystem. Subsequently, BNB broke through $640 and reached a high of $725, with significantly increased market heat.
Here is the English translation of the text, with the content within <> tags left untranslated:Broccoli: On February 13, CZ responded to netizens' questions about his pet, saying he had a Belgian Malinois, and then a large number of imitation platforms emerged on the BSC chain. On February 14, CZ announced the pet's name as Broccoli, without providing the contract address, but the community Meme coin erupted, causing congestion on the BSC chain, Fourmeme website lagging, and transactions being obstructed. CZ later stated that this "stress test" exposed the technical issues that still need to be optimized on the BSC chain.
SHELL: On February 13, BSC Chain, Binance Wallet, and PancakeSwap collaborated to conduct a public offering of the SHELL token (Binance Labs is one of the investors in MyShell), and this activity was oversubscribed by 105 times, with a total of 134,606 BNB participating in the subscription.
5.4 Bybit's cold wallet was hacked, setting a record for the largest cryptocurrency heist in history
On February 21, the cold wallet of the Bybit exchange was attacked by hackers, resulting in the theft of assets worth $1.46 billion. This not only set a record for the largest single loss in the cryptocurrency field, but also surpassed the $1 billion theft from the Central Bank of Iraq in 2003, becoming the largest theft in global financial history. Under such a massive theft, ETH fell below the $2,700 mark in a short period of time. After the incident, multiple exchanges and institutions deposited funds to support Bybit, and within 12 hours of the security incident, Bybit's inflow of funds exceeded $4 billion, covering the loss of the stolen assets. Bybit's rapid response temporarily alleviated the market's panic. Furthermore, Bybit's need to purchase ETH caused the price of ETH to rebound to $2,800.
6. Outlook for Next Month
6.1 BNB Chain is expected to lead a new MEME craze
In February, against the backdrop of Altcoin correction and pressure on the Solana ecosystem, BNB Chain broke through the trend through multiple strategies. The frequent statements by Binance founder CZ (such as supporting Meme coins and emphasizing the technical roadmap) injected a tonic into the ecosystem, with his tweets directly driving hundreds-fold increases in tokens like $TST, forming a significant wealth effect. According to the 2025 roadmap released by BNB Chain, technical upgrades (such as sub-second block confirmation and anti-MEV wallet tools) and user experience optimization (reducing Gas fees and multi-currency Gas payment) are the core, aiming to create a lower threshold environment for Meme trading, so it can be inferred that MEME will be one of the main development goals of BNB Chain in 2025.
Currently, under the influence of Binance's traffic, BNB Chain has already kicked off the first stage of the MEME heat cycle. In the context of the current market lacking new narratives, BNB Chain may continue to rely on the heat of Meme coins to maintain market attention, and high-return MEME coins may still emerge in the BNB Chain ecosystem in the short term. In addition, BNB Chain's phased victory has shown opportunities for other public chain ecosystems, and more ecosystems may borrow the "event marketing + technical upgrade + wealth effect" three-pronged strategy of BNB Chain for promotion, thereby leading a new wave of craze.
6.2 VC tokens are active and are expected to regain market favor
The current cryptocurrency market is showing structural differentiation: against the backdrop of widespread Altcoin correction, the decline of the Solana ecosystem Meme craze, and the lack of new narratives in the market, new VC tokens represented by KAITO, IP, and Shell have emerged, recording significant gains of 33%, 555%, and 124% respectively. These projects exhibit two common characteristics: first, the initial circulating proportion is generally low, and second, the airdrop release is concentrated in the early stage of the project. This token economic design leads to huge selling pressure in the initial opening, coupled with the market's previous memory of VC tokens generally "breaking below the issue price upon listing", often forming a "high open, low close" short-term trend. But there has been an important change in the market recently: recent VC tokens have successfully reversed the traditional path of "peaking upon listing" through high control and continuous positive news release (such as ecosystem cooperation and technical upgrades), causing their token prices to rise against the trend. Whether they can maintain a stable upward trend still needs to be closely monitored.
