Bitcoin’s sharp drop below $86,000 on Wednesday has amped up debates about whether the crypto bull market is done. After reaching a daily closing all-time high of $106,155, BTC has now entered a high-timeframe downtrend, with the confirmed break of key support in the $91k-92k area.

Truflation says disinflation trend is intact:

Truflation’s US Inflation Index is dropping fast, while the 1-year breakeven rate remains elevated — suggesting elevated inflation expectations could soon reverse. A falling breakeven rate is bullish for risk assets, as it frees up capital otherwise hedged against inflation. If growth remains steady, this liquidity boost could fuel equities, credit and crypto.

Financial conditions should move toward ease after a Q4 tightening, so unless something in the economy breaks, expect economic data to soon outpace bearish consensus. When breakevens peak, it’s a signal the cycle is shifting bullish.

— Macauley Peterson

Builders and Devs: You Are Wanted on Stage!

Permissionless speaker applications are open. If you’re a technical founder, CTO, or developer, apply!

Some conferences recap the past. Permissionless IV is about what’s next.

📅 June 22–26 | Brooklyn, NY

Sentiment: Bleak

I’ve had a horizontal line on my main BTC chart since the Nov. 26 test of the $91k level: “1D close below here = end of bull market.” 

With bitcoin ETFs experiencing over $2.4 billion in net outflows throughout February and broader macroeconomic pressures weighing on risk assets, the question arises: Is this just a correction, or are we witnessing the start of a prolonged downturn?

Sorry to say, I’m now in the latter camp. After posting intraday lows around $86k — a nearly -20% retracement from its peak — the market may well be due for a bounce, but the support breakdown level is likely to provide firm resistance and it will take some serious force to get back into the range. It’s frankly hard to see a near-term catalyst for that.

Bybit hack the last straw

The recent Bybit hack — now attributed to a compromised Safe wallet developer — has shaken some investors’ confidence, perpetuating fear-driven selling. 

Bybit says it has replenished its ETH supplies and seems to have had no trouble servicing withdrawals, but the damage to market liquidity is evident.

The hack’s fallout could also step up regulatory oversight, with Komodo Platform CTO Kadan Stadlemann suggesting that lawmakers may push to tighten consumer protections further.

“This could include mandatory insurance for user funds, stricter licensing requirements for exchanges and the establishment of dedicated regulatory bodies to oversee cryptocurrency operations,” Stadlemann told Blockworks.

Outflows, liquidations and rate uncertainty

Aside from the Bybit hack, MEXC COO Tracy Jin attributes bitcoin’s decline to a combination of ETF outflows and macroeconomic uncertainty.

“Bitcoin has broken through the $90,000 level, triggering liquidations worth over $1 billion,” Jin noted. “ETF outflows have persisted for six consecutive days, surpassing $2.4 billion in February alone.”

For the moment, we still have no reason to doubt the Federal Reserve’s hawkish stance in delaying expected rate cuts until the second half of 2025. Higher-for-longer interest rates dampen demand for speculative assets like bitcoin, while new US tariffs stoke inflation concerns. (Not everyone is on board with this view as noted in Truflation’s read above). 

Bright spots: Uniswap’s SEC win and Saylor’s Strategy

Despite the bearish sentiment, there was a major win for DeFi yesterday: The SEC has dropped its investigation into Uniswap. Kevin Rusher, founder of RAAC, sees this as a pivotal moment.

“The SEC dropping its investigation into Uniswap isn’t enough to drag the market out of its current hole, but it’s a massive win for crypto,” Rusher said. “This decision paves the way for a shift from memecoins to projects with real utility.”

In the long run, more legal clarity should provide long-term support for DeFi’s growth.

Michael Saylor, of course, remains bullish. The newly renamed Strategy (still $MSTR) spent nearly $2 billion acquiring 20,356 BTC over the past week. Saylor’s continued accumulation comes as the premium on MSTR shares, relative to its NAV, dropped to its lowest point in a year.

So, buy the dip or expect a deeper correction? Given BTC breaking key support, short-term downside risk remains. Long-term fundamentals — institutional adoption and regulatory clarity — still favor crypto. The coming days will be revealing. If BTC fails to reclaim $90,000–$96,000, one would expect a deeper correction into the $70s. But if ETF outflows stabilize and risk appetite returns, bitcoin’s bull market may still have legs.

— Macauley Peterson

IBC V2 and the Cosmos Hub

The rollout of IBC v2 and its canonical deployment, Eureka, has ignited a debate within the Cosmos ecosystem. At the core of the discussion is whether this implementation maintains the openness of IBC or structurally centralizes cross-chain liquidity flows around the Cosmos Hub.

Barry Plunkett, now heading IBC and Hub development, argues that Eureka is not an enshrinement of the Hub but rather a monetized, well-supported deployment of IBC v2. The core protocol remains permissionless, but the default deployment offers provers, relayers and routing infrastructure that many teams may prefer given the complexities of running their own. IBC v2 mirrors models seen in Ethereum’s L2 ecosystem, where not every project needs to build a full bridging stack from scratch.

Critics highlight that using Eureka means routing through the Hub or risk affecting token fungibility. Assets moving from Ethereum → Hub → Osmosis differ from those going directly to Osmosis, creating fragmented liquidity. Barry clarifies that projects can use the contracts without routing through the Hub but would need to bear the costs of relaying, proving and attestation.

At issue is value capture. IBC’s long-standing challenge has been sustainability — monetizing infrastructure while preserving its open-source ethos. While some believe the Cosmos Hub should remain a neutral public good, others see no path forward without sustainable incentives for ATOM and its governance.

This debate isn’t just about technology — it’s about whether Cosmos should prioritize sovereignty or economic alignment to sustain its vision.

— Macauley Peterson