Monthly Crypto Alpha Report – February 2025

When in doubt, zoom out. There has been so much turmoil and confusion in the past two weeks.

Let’s discuss what happened butlet’s also take this month’s Alpha Report as an opportunity to get a bird’s eye view.

Market Roundup

Now that Trump is president, a wave of bullish news has flooded the market. Here’s a selection of bullish news items:

• The American SEC is busy setting up a crypto task force. This will finally create clear rules and regulations for the US crypto industry.
• The US President launched a memecoin.
• The SEC allowed banks to store crypto.
• Tornado Cash sanctions have been lifted by a US judge.

These are all news items that would have been unthinkable a year ago. So why haven’t prices gone up? Well, this bullish news was already priced in after Trump got elected. At the same time, some news has spooked the markets in recent weeks:

• Tariffs: Trump’s threat to slap a 25% import tariff on imports from Canada, Mexico and China. 
• DeepSeek: the Chinese AI model that appears to radically decrease the cost of AI training and inference.

The latter two developments have caused a lot of uncertainty. It’s not clear yet if and what the implications are. Markets hate uncertainty.

But still. As promised, let’s zoom out. It’s good to remind ourselves that we have just closed a monthly candle for BTC above the 100k level. 

Now, let’s look at the big picture of the macro landscape. The US central bank is still on course for a soft landing. In January’s meeting, the FED hit the pause button on rate cuts, keeping rates roughly 1.5% above inflation. The BTC price was largely indifferent.

What happened a few days later had a bigger impact: DeepSeek. On January 26, the price of bitcoin fell by 7% from 105.000 dollars to just below 98.000 dollars.

DeepSeek R1 is a Chinese AI model that can compete with OpenAI’s o1, the best LLM available to the general public, at a fraction of the compute cost. The news disrupted the AI industry. It’s a breakthrough that challenges the dominance of Nvidia and other American incumbents. Nvidia stock price dropped, as the markets chewed on the news that the Chinese can achieve this performance so easily, which begs the question how many fewer chips from Nvidia are needed.

And so, Nvidia stock dropped when the markets opened on Monday 27. The behavior of BTC was interesting. It dropped only when the American futures market opened. This hints at the hypothesis that institutional investors sold off technology stocks and BTC. There is no fundamental reason for BTC’s drop. After all, why should BTC suffer from an AI breakthrough?

Indeed, while tradfi investors were still in shock, retail bitcoiners bought the dip. The BTC price quickly recovered, while Nvidia hasn’t. 

Ethereum Lining up for a Breakout

So let’s zoom out on Ethereum. Patience is required with the coin that was the fan favorite of the previous bull market. After the failed breakout out of the triangle pattern, we’re back in it. Sentiment is still bad and it has spread to the Ethereum Foundation. Some ETH heads demand a faster timeline for the roadmap, and a change in leadership.

Still. How is it possible that ETH is still trading in a range while World Liberty Financial, the Trump family’s DeFi project, has been buying Ether. I’ll reiterate that: the president of the USA is buying ETH and it’s still not made a new all-time high…

If you were to look at this multi-year chart out of context, you would say: bullish. The ETH price is squeezed in a large triangle and potentially forming an inverse head-and-shoulders, which is a bullish pattern. Breaking above roughly $4150 would mean ETH is on the road to 8k. But we’ll have to be patient.

Solana

SOL hit a new all-time high in January.

SOL appears to be in an ascending channel, looking solid. Quickly after the recent ‘tariff dip’ it bounced and never really left the channel.

Airdrops of the Month

Top Altcoins to Watch

DeFi Farm of the Month

Final Notes

After two months in a price range, some investors’ patience is running out. Trump is in office so why haven’t we seen new all-time highs? Patience, friends. We can’t have a next pump without consolidating first. Periods of consolidation are healthy and necessary. Touch grass.

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Legal Disclaimer

TCL Publishing ltd (director Lark Davis, owner of Wealth Mastery) is not providing you individually tailored investment advice. Nor is TCL Publishing registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. TCL Publishing is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.

You can find a full disclosure of all my crypto & venture investments here.