Bitcoin wobbles at $63K as ETF outflows build; Terraform Labs targets Jane Street, Binance rebuts Iran claims, Step Finance shutters, Buterin sells 10,723 ETH

Crypto markets opened the week on their back foot. Bitcoin briefly lost $63,000 as fear overtook positioning, with the Fear & Greed Index printing a rare 5. The debate isn’t whether sentiment soured — it’s whether the market has actually capitulated. I don’t think it has yet, and the ETF plumbing is the tell.

Why ETF flow is the hinge - Data first: spot bitcoin ETFs posted another $203 million in net outflows on Monday, extending their longest redemption streak since March 2025. That’s institutional de-risking, not panic selling. - Structure matters: this selloff looks leverage-led. Analysts, including Bitrue’s Andri Fauzan Adziima, see long-term holders sitting tight while short-term traders absorb the drawdown. That aligns with thinner liquidity and systematic deleveraging — funding resets, basis compression, and risk desks trimming. - Psychology lags mechanics: “Extreme fear” at 5 tends to show up before real balance-sheet stress. True capitulation often needs forced sellers beyond perps — think sustained ETF outflows meeting low-liquidity weekends or a break in key collateral levels that forces cascading liquidations. - Levels with teeth: the $60,000–$65,000 band is the decision zone. Lose $60,000 decisively and you invite a liquidation wave that can slide into the mid-$50,000s; in a worst case, models point to ~$47,000. Hold the band and you reset positioning without wrecking the cycle. - My read: the market is purging excess leverage, not long-term conviction. Full capitulation needs a sharper feedback loop — heavier ETF redemptions, dealers offloading inventory, or a macro jolt — none of which have fully converged yet. Until then, expect jagged ranges and headline-driven wicks.

Meta’s payments itch returns Reports indicate Meta could pursue a stablecoin integration this year to reboot digital payments. If executed inside existing consumer surfaces, that can compress on/off-ramp friction and nudge mainstream users into tokenized flows — a distribution story first, a DeFi story later.

Legal, compliance, and security moves to watch - Terraform Labs vs. Jane Street: The liquidation administrator sued Jane Street, alleging the firm used non-public information from insiders to front-run trades ahead of the Terra-Luna collapse. The filing cites a May 2022 episode where a wallet allegedly tied to Jane Street withdrew 85 million UST shortly after Terraform removed 150 million UST from Curve without public disclosure. Jane Street denied the claims and pointed to alleged internal fraud at Terraform. The administrator also linked Jump Trading to the purported leaks. - Binance and Iran-flow reports: Binance rejected reports that it fired investigators who identified roughly $1.7 billion in crypto flows to Iran-linked entities. The exchange said no one was dismissed for raising compliance concerns and that an internal review found no sanctions violations tied to the flagged transfers. Binance added it has reduced direct exposure to major Iranian crypto exchanges by more than 97% since early 2024, while noting public chain transfers cannot be completely blocked. The New York Times and Wall Street Journal previously reported the investigators were disciplined and the probe was dismantled. - Step Finance shuts down: After a Jan. 31 exploit drained $40 million from treasury and fee wallets, Solana-based Step Finance will wind down. Attempts to secure external capital or an acquisition failed, prompting dissolution of the parent and subsidiaries. New operations at SolanaFloor are halted; affiliated Remora Markets said tokenized assets remain fully backed and redeemable. A STEP token buyback based on a pre-exploit snapshot is planned; STEP fell about 40% in 24 hours.

Flows from Ethereum’s co-founder Vitalik Buterin sold 10,723 ETH in February for about $21.7 million, converting to stablecoins. This follows his late-January pledge to deploy roughly $45 million of personal ETH toward open-source software, hardware, governance, and biotech. The timing arrives as ETH is down 38% over 30 days and still more than 60% below its all-time high.

On the radar - U.S. mortgage data: Wednesday, 7 a.m. ET - U.S. President Donald Trump’s State of the Union: tonight, 9 p.m. ET - FOMC’s Thomas Barkin: remarks Wednesday, 9:30 a.m. ET - Token unlocks: Plasma among projects - Bitcoin for Corporations: conference concludes in Las Vegas

If bitcoin holds the $60,000–$65,000 shelf while ETFs stabilize, the market can rebase without a full purge. If that shelf breaks with accelerating outflows, the capitulation many keep waiting for finally has the architecture to show up.