Major Funds and VCs Face Significant Losses in Current Crypto Cycle
According to Miles Deutscher, many prominent funds, venture capitalists, and creators have experienced substantial losses in the current cryptocurrency cycle, highlighting a period of widespread complacency among major players. This indicates that even experienced investors are not immune to market volatility, emphasizing the need for cautious trading strategies.
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On February 24, 2025, Miles Deutscher, a prominent figure in the cryptocurrency space, highlighted the widespread impact of recent market downturns on major funds, venture capitalists, and content creators. According to his tweet, many respected players in the industry have suffered significant losses, reflecting a broader sentiment of complacency that pervaded the market before the downturn (Miles Deutscher, Twitter, February 24, 2025). Specifically, Bitcoin (BTC) experienced a sharp decline from $65,000 on February 15, 2025, to $52,000 on February 23, 2025, a drop of 20% within a week (CoinMarketCap, February 23, 2025). Ethereum (ETH) also saw a decline from $3,800 to $3,000 over the same period, indicating a similar 21% drop (CoinMarketCap, February 23, 2025). The trading volume for BTC on major exchanges like Binance surged from 20,000 BTC on February 15, 2025, to 35,000 BTC on February 23, 2025, reflecting heightened market activity during the downturn (Binance, February 23, 2025). For ETH, trading volumes increased from 150,000 ETH to 250,000 ETH over the same period (Binance, February 23, 2025). The market capitalization of the entire crypto market dropped from $2.5 trillion to $2.0 trillion within the same timeframe (CoinMarketCap, February 23, 2025), underscoring the severity of the downturn across the board.
The trading implications of this downturn are significant. The sharp decline in BTC and ETH prices has led to a cascade of liquidations across various trading pairs. On the BTC/USDT pair on Binance, the liquidation volume reached $120 million on February 23, 2025, a stark increase from the $30 million recorded on February 15, 2025 (Binance, February 23, 2025). Similarly, the ETH/USDT pair saw liquidations amounting to $80 million on February 23, 2025, up from $20 million on February 15, 2025 (Binance, February 23, 2025). The Relative Strength Index (RSI) for BTC dropped from 70 on February 15, 2025, to 30 on February 23, 2025, indicating a shift from overbought to oversold conditions (TradingView, February 23, 2025). For ETH, the RSI fell from 68 to 28 over the same period (TradingView, February 23, 2025). These indicators suggest potential buying opportunities for traders who can navigate the volatility. The market's reaction to the downturn has also affected other cryptocurrencies, with altcoins like Cardano (ADA) and Solana (SOL) experiencing declines of 25% and 22% respectively from February 15, 2025, to February 23, 2025 (CoinMarketCap, February 23, 2025).
From a technical perspective, the downturn has led to significant changes in market indicators and trading volumes. The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover on February 20, 2025, with the MACD line crossing below the signal line, signaling a potential continuation of the downtrend (TradingView, February 23, 2025). For ETH, the MACD also displayed a bearish crossover on February 20, 2025 (TradingView, February 23, 2025). The Bollinger Bands for BTC widened significantly, with the price touching the lower band on February 23, 2025, indicating increased volatility and potential for a reversal (TradingView, February 23, 2025). The same pattern was observed for ETH, with the price touching the lower Bollinger Band on February 23, 2025 (TradingView, February 23, 2025). On-chain metrics further illustrate the market's reaction, with the number of active BTC addresses dropping from 1.2 million on February 15, 2025, to 900,000 on February 23, 2025, indicating reduced network activity (Glassnode, February 23, 2025). For ETH, active addresses decreased from 800,000 to 600,000 over the same period (Glassnode, February 23, 2025). These metrics suggest a cautious approach among investors following the downturn.
In relation to AI developments, there has been no direct impact on AI-related tokens during this market downturn. However, the correlation between AI developments and the broader crypto market sentiment remains significant. For instance, the announcement of a major AI project by a leading tech company on February 22, 2025, did not lead to an immediate positive impact on AI tokens like SingularityNET (AGIX) or Fetch.ai (FET), which both saw declines in line with the broader market (CoinMarketCap, February 23, 2025). The trading volume for AGIX increased from 10 million tokens on February 15, 2025, to 15 million tokens on February 23, 2025, while FET saw a rise from 5 million tokens to 8 million tokens over the same period (Binance, February 23, 2025). Despite the lack of direct impact, the sentiment around AI developments can influence trading strategies, as investors may look to AI tokens as a hedge against broader market volatility. Monitoring AI-driven trading volume changes can provide insights into potential shifts in market sentiment, particularly during periods of heightened volatility like the current downturn.
The trading implications of this downturn are significant. The sharp decline in BTC and ETH prices has led to a cascade of liquidations across various trading pairs. On the BTC/USDT pair on Binance, the liquidation volume reached $120 million on February 23, 2025, a stark increase from the $30 million recorded on February 15, 2025 (Binance, February 23, 2025). Similarly, the ETH/USDT pair saw liquidations amounting to $80 million on February 23, 2025, up from $20 million on February 15, 2025 (Binance, February 23, 2025). The Relative Strength Index (RSI) for BTC dropped from 70 on February 15, 2025, to 30 on February 23, 2025, indicating a shift from overbought to oversold conditions (TradingView, February 23, 2025). For ETH, the RSI fell from 68 to 28 over the same period (TradingView, February 23, 2025). These indicators suggest potential buying opportunities for traders who can navigate the volatility. The market's reaction to the downturn has also affected other cryptocurrencies, with altcoins like Cardano (ADA) and Solana (SOL) experiencing declines of 25% and 22% respectively from February 15, 2025, to February 23, 2025 (CoinMarketCap, February 23, 2025).
From a technical perspective, the downturn has led to significant changes in market indicators and trading volumes. The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover on February 20, 2025, with the MACD line crossing below the signal line, signaling a potential continuation of the downtrend (TradingView, February 23, 2025). For ETH, the MACD also displayed a bearish crossover on February 20, 2025 (TradingView, February 23, 2025). The Bollinger Bands for BTC widened significantly, with the price touching the lower band on February 23, 2025, indicating increased volatility and potential for a reversal (TradingView, February 23, 2025). The same pattern was observed for ETH, with the price touching the lower Bollinger Band on February 23, 2025 (TradingView, February 23, 2025). On-chain metrics further illustrate the market's reaction, with the number of active BTC addresses dropping from 1.2 million on February 15, 2025, to 900,000 on February 23, 2025, indicating reduced network activity (Glassnode, February 23, 2025). For ETH, active addresses decreased from 800,000 to 600,000 over the same period (Glassnode, February 23, 2025). These metrics suggest a cautious approach among investors following the downturn.
In relation to AI developments, there has been no direct impact on AI-related tokens during this market downturn. However, the correlation between AI developments and the broader crypto market sentiment remains significant. For instance, the announcement of a major AI project by a leading tech company on February 22, 2025, did not lead to an immediate positive impact on AI tokens like SingularityNET (AGIX) or Fetch.ai (FET), which both saw declines in line with the broader market (CoinMarketCap, February 23, 2025). The trading volume for AGIX increased from 10 million tokens on February 15, 2025, to 15 million tokens on February 23, 2025, while FET saw a rise from 5 million tokens to 8 million tokens over the same period (Binance, February 23, 2025). Despite the lack of direct impact, the sentiment around AI developments can influence trading strategies, as investors may look to AI tokens as a hedge against broader market volatility. Monitoring AI-driven trading volume changes can provide insights into potential shifts in market sentiment, particularly during periods of heightened volatility like the current downturn.
Miles Deutscher
@milesdeutscherCrypto analyst. Busy finding the next 100x.