Market pulse: Bitcoin cools after $70K retest as institutions rotate assets — and Washington vs. states heats up over prediction markets
Bitcoin gave back some of a weekend surge after briefly retesting $70,000, leaving sentiment mixed heading into the third week of February. Here’s a tighter, more digestible look at the headlines moving crypto markets.
Price action and sentiment
– After a weekend push above $70K, BTC slid to an intraday low of $67,200 on Feb. 16 and was hovering around $68K at the time of reporting.
– The pullback erased some bullish momentum and pushed broad crypto sentiment back toward “extreme fear.”
– Bitfinex analysts argue the move looks like stabilization rather than a leveraged squeeze: derivatives positioning appears constructive, funding rates have normalized, options exposure is roughly neutral, and roughly 18,400 BTC were withdrawn from exchanges last week — a sign traders aren’t aggressively hedging tail risk or piling back on leverage.
– Bitfinex’s baseline: expect BTC to trade in a wide range between about $55K and $78.2K until a clearer bull run begins.
Institutional flows and reallocation
– Crypto exchange-traded products (ETPs) experienced $173 million in cumulative outflows last week — the fourth consecutive week of net redemptions.
– Over the past four weeks, nearly $4 billion left crypto ETPs, driven largely by Bitcoin and Ethereum. Last week alone, BTC ETPs saw roughly $133 million withdrawn and ETH ETPs saw about $85 million outflows (CoinShares).
– Not all institutional interest faded: XRP and Solana attracted fresh institutional demand, with inflows of $33.4 million and $31 million respectively — a reminder that capital is rotating within the market even as BTC/ETH see net withdrawals.
Notable portfolio moves
– Harvard Management Company trimmed its stake in BlackRock’s iShares Bitcoin Trust (IBIT) by 21% in Q4 2025, SEC filings show. As of Dec. 31 it held 5.35 million IBIT shares (about $265.8 million), down about 1.48 million shares for the quarter — though the university’s BTC exposure still represents a record-high public investment in its portfolio.
– Simultaneously, Harvard made its first disclosed purchase of BlackRock’s iShares Ethereum Trust (ETHA), investing about $86.8 million. Whether this is rebalancing or a hedge is not specified.
Regulatory showdown: CFTC vs. states on prediction markets
– A legal and jurisdictional fight over “event contracts” — prediction markets — is heating up. Some states, including Nevada, treat certain contracts as gambling and want them regulated under state law.
– The Commodity Futures Trading Commission (CFTC) disagrees, arguing these markets are risk-management tools that aggregate probabilities and hedge exposures. CFTC Chair Mike Selig warned that state-level restrictions would “undermine the agency’s exclusive jurisdiction,” saying the commission “will no longer sit idly by while overzealous state governments undermine” that authority.
– The CFTC has joined Crypto.com in suing Nevada over the issue. The court’s decision could set an important precedent for how prediction markets are regulated in the U.S.
What it means
– Near-term: expect choppy price action and continued capital rotation as investors trim BTC/ETH exposure while selectively buying altcoins.
– Medium-term: derivatives and funding normalization suggest fewer liquidation shocks for now, but institutional outflows from ETPs indicate risk sentiment remains fragile.
– Regulatory risk: the outcome of the CFTC vs. Nevada case could materially affect the legal framework for prediction markets and influence product development and investor access in the U.S.
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