How Low?

Where were you when Bitcoin fell below its last-cycle high? Well, at least we’re not alone: markets everywhere have been suffering, assailed by geopolitical headwinds and concerns that Trump’s nominee for Fed chair, Kevin Warsh, may not be in favour of turning on the money printer any time soon.

Today’s forward guidance looks at some of the reasons why crypto in particular has been plunging so badly, including deliberate suppression and stresses in the private credit market. The worst may not be over.

However, it’s not all doom and gloom. One crypto project has been shrugging off the bad vibes and posting impressive gains off the back of technical innovations and a reduction in supply overhangs. Read on to learn how Hyperliquid is defying the bears.

😱 Epstein’s Crypto Connection 😱

You can’t have failed to notice that much of the news cycle of late has been dominated by the latest (and supposedly final) dump of the Epstein Files. The recent revelations have sent shockwaves around the world, leaving many rich and powerful men with awkward questions to answer. And, as if crypto wasn’t having a hard enough time of it already, Bitcoin, along with a number of other crypto projects and personalities, has cropped up a few times in the files as well.

In today’s video, we look at how Epstein wormed his way into the world of crypto and assess the scale of his involvement. With many wild conspiracy theories flying around the internet, it’s important to evaluate the available information carefully and separate fact from fiction. Did Epstein really fund Bitcoin’s early development? Did he try to influence its direction at any point? And who exactly was he talking to from the industry and why? All will be revealed…

You can watch that video here.

📈 Crypto Market Forecast 📈

There could be worse yet to come. Consider that margin debt in the stock market had been rising sharply in recent weeks. In plain English, investors have increasingly been using their stocks as collateral to borrow money to buy more stocks, something that results in liquidations when prices fall slightly.

As most of you will know, the crypto market experienced massive long liquidations last week, especially last weekend. What you may not know is that there were also liquidations in DeFi and CeFi. Put simply, lots of investors have been borrowing against their BTC and ETH. Now that prices are falling they are being forced to sell, and it looks like large players were affected.

This would explain why Binance recently announced it would be buying $1 billion in BTC over the next 30 days, and why it spent half of this money in the first few days. From the outside looking in, it appears that Binance is trying to prevent BTC’s price from falling in order to prevent liquidations of other large players in the crypto market. This opens the door to another unsettling possibility.

For a long time, many crypto investors and analysts have speculated that crypto prices were being suppressed. The only problem is that it wasn’t clear why. Recent events suggest it could be because someone is trying to liquidate large players in the crypto market who have been borrowing against BTC and ETH. Note that these liquidation levels can be seen on-chain.

This begs the question though of why crypto prices have seemingly failed to find support on the way down. Besides liquidations on exchanges, in DeFi, and in CeFi, the answer is a shortage of liquidity. As some of you will know, crypto disconnected from global liquidity in the summer of 2025. This resulted in less momentum (no blow-off top) and less breadth (no altseason).

Some macro analysts have started pointing out that the reason for this disconnect could be issues in private credit. Consider that the crypto industry has had a hard time borrowing money from banks. This meant borrowing primarily from private credit. As private credit started experiencing issues, this crypto lending disappeared, creating a liquidity shortage.

This would explain why so many crypto treasury companies launched in the summer of 2025. Their purpose could have been to try and increase crypto market liquidity when private credit liquidity ran out (either that or to provide exit liquidity for insiders). Whatever the case, these crypto treasury companies have become sources of leverage, and are now under pressure.  

Meanwhile, the macro backdrop appears to be deteriorating, with ADP employment data for January coming in lower than expected. At the same time, the Trump administration delayed the release of the January unemployment print. Officially, this was because of the partial government shutdown last weekend. Unofficially, it could be an excuse to delay bad numbers.

It looks like we will find out this Wednesday when the delayed print is finally released. Investors are expecting a 4.4% unemployment rate, the same as December. This seems unlikely simply because there tends to be seasonal hiring heading into the holidays. Once the holidays are over, all that hiring stops. This suggests the unemployment rate could come in higher.

In sum then, the crypto market has lots of leverage and not much liquidity. With a deteriorating macro backdrop and falling stock prices, crypto could be headed much lower this week. The only caveat is that this drop has resulted in lots of short leverage. This increases the chances of a short squeeze if there’s a small bounce, which is likely since nothing goes down only.

The catch is that this crypto drawdown appears to be driven primarily by an unwind of leverage. When this kind of mechanical forced selling starts, it’s very hard to stop. Now is a good time to watch our video from last year about how the crypto markets work if you haven’t already. Leverage is rocket fuel on the way up, but dynamite on the way down.

🌊 Hyperliquid 🌊

Last week was absolutely brutal for the crypto market.

BTC dropped nearly 30% in a week, going from a price of $84K on January 31st to nearly $60K on February 6th. The last time BTC was at this price was in September 2024. It’s safe to say we’re officially in a bear market. BTC’s fall was mirrored by almost every major altcoin - except HYPE.

Somehow, HYPE (the native coin of the perps DEX Hyperliquid) is the only non-stablecoin crypto with a market cap in the billions that is still in the green on the weekly (at least at the time of writing). A closer look at the chart reveals that its recent strength is part of a broader rally that saw it surge 65% from a low of $21 in late January to its current price of roughly $35.

So, what’s the secret?

Well, the rally seems to be driven by multiple factors. On the demand side, the team announced a slew of updates and new features that has seen the project gain mindshare among investors. On the supply side, a number of previously priced-in sources of sell pressure have now been exhausted or adjusted, returning confidence in the asset.

Let’s elaborate on all this a little.

On the demand side, the main driving forces are HIP-3 (builder-deployed perpetuals) and HIP-4 (outcome trading). For context, both HIP-3 and HIP-4 are upgrades to Hyperliquid’s core infrastructure, allowing users and builders to create new types of markets on the exchange.

HIP-3, launched in Oct 2025, allows anyone to permissionlessly create a perpetuals market on Hyperliquid by staking 500,000 HYPE. This was a major upgrade that not only decentralised the market listings directly on its order book infrastructure but also allowed for third-party issuers to list synthetic assets representing stocks, indices, foreign exchange markets, and commodities.

In fact, open interest on HIP-3 markets now represents over 13% of total open interest on Hyperliquid. While the open interest share of HIP-3 markets has been steadily growing since launch, it saw a significant boost during the recent metals market frenzy.

Notably, HIP-3 markets for gold, silver and copper account for nearly 40% of HIP-3’s current open interest. With that said, it should come as no surprise that HIP-3 markets hit a new milestone last week with an all-time high of $1B in open interest and $4.8B in 24-hour volume. We expect HIP-3 to increasingly drive volumes and open interest on Hyperliquid, especially during periods of low interest in altcoins, such as the ongoing bear market.

As for HIP-4, it’s the next big upgrade to the Hyperliquid ecosystem. Originally proposed by Bedlam Research in September 2025, it allows Hyperliquid to support binary ‘outcome markets’ on its exchange – i.e., it makes prediction market contracts (among others) possible on Hyperliquid. This contributed to increased mindshare last week as the Hyperliquid team officially announced it would begin supporting outcome markets, with contracts currently in testnet.

Meanwhile, on the supply side, some believe a large contributor to Hyperliquid’s previous fall from the high $40 range to the sub-$30 range in recent months comes from investors pricing in certain overhanging sources of sell pressure that threatened to pull HYPE’s price down. These sources of sell pressure have now been exhausted or adjusted so as to not pose an immediate threat.

Specifically, there were two main sources of sell pressure that weakened investor confidence in HYPE’s short-term price performance. The first one is the team’s allocation that was scheduled to unlock ~9.9M HYPE each month for 24 months from November 2025. This was cited by Arthur Hayes’ Maelstrom Fund as a major threat to price confidence in HYPE. At current prices, that assumes a roughly $300M monthly sell overhang.

For the most part, this was a valid concern. However, the Hyperliquid team has since countered these concerns through a combination of proactive transparency, structural adjustments, and on-chain actions. Specifically, since the first unlock, the team has only distributed a small portion of the 9.92 million HYPE tokens unlocked each month.

In fact, ahead of the February unlock, the team announced a nearly 90% cut in monthly team allocations, reducing the February release from 1.2 million HYPE to just 140,000. Most of the unlocked supply has been either restaked or left idle in what some believe to be allocations to the ecosystem fund. In the last two monthly unlocks, only 7-10% of the headline unlock number has supposedly resulted in direct or indirect sell pressure. Even then, most of the sales were made through OTC desks to entities like Hyperliquid Strategies, a digital asset treasury company accumulating HYPE.

The second main source of sell pressure was a community identified cluster of 16 wallet addresses, originally funded via Tornado Cash, holding roughly 4.4M HYPE tokens (worth roughly $150M at current prices). This cluster of wallets began liquidating its holdings in early January, through a highly mechanical liquidation strategy that saw it TWAP a portion of its holdings each day on Hypercore.

Notably, X user Ericonomics claims that in typical circumstances this sell pressure would have brought HYPE’s price under $10. However, onchain evidence suggests that an unknown offchain buyer (suspected to be Hyperliquid Strategies) helped offset the sell pressure by aggressively accumulating HYPE on Bybit at the same time. This strong investor support has seen confidence in HYPE return to healthy levels.

Besides these two, Hyperliquid also saw a number of other bullish developments this week, including HYPE listing on Coinbase and an integration with Ripple Prime, the institutional prime brokerage platform. As it stands now, the long-term potential for HYPE seems more viable than ever before. While it remains to be seen if the launch of HIP-4 could further accelerate volumes on Hyperliquid, it’s safe to say it has established itself as a key project to watch and potentially accumulate during this bear market.

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🔮 Video Pipeline 🔮

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🏆 What's New at CoinBureau.com This Week? 🏆

* How Cryptocurrency Markets Are Structured: A Guide to Spot, Derivatives, and OTC Trading
* Explore The Most Secure & Trusted Crypto Exchanges In 2026
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* Tangem Pay Explained: Self-Custodial Crypto Spending on Visa Rails
* Evaluating Toobit’s Safety, Security Measures, and Platform Risk in 2026

📖 Quote of the Week 📖

This bear market has put us through many trials, but it’s through these trials that we emerge stronger than ever - keep going.

“The gem cannot be polished without friction, nor man perfected without trials” - Chinese Proverb

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.