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OVERVIEW

Dear Crypto: Don’t Play With My Heart This Close To Valentine’s Day 💘

Source; Giphy

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total market cap and altcoin market cap charts:

Source: TradingView

NEWS IN THREE SENTENCES
Crypto News 📰

🍀 Cathie Wood Bets on $1.5M Bitcoin

She says institutions are all over BTC like ants on a sugar hill, driving it to $1.5M by 2030. But it first has to conquer the $100,000 barrier to really blow the top off. Scarcity plus big-money FOMO is a recipe for “get in or get left behind.” Crypto-Economy.

😨 Over 300 Freed from Myanmar Crypto Scam Hell

Thailand pulled the plug—literally—on border electricity, freeing hundreds trapped in scam factories. The Thai government refuses to house them permanently, so border patrol camps are the new pit stops. Criminals in suits are next on the eviction list if they can’t keep their shady operations hidden. Protos.

🤑 Galaxy, Ripple CEOs Saved MoonPay’s TRUMP Coin Frenzy

Demand for the TRUMP memecoin soared, nearly DDoS’ing MoonPay’s wallet and emptying its liquidity. Mike Novogratz and Brad Garlinghouse tossed them a cool $160 million lifeline over a holiday weekend. That coin shot to a $70B fully diluted value, fueling the age-old debate of hype vs. ethics. Cointelegraph.

🚨 zkLend Exploit Bleeds $9.5 Million

A hacker drained funds from Starknet to Ethereum, then hopped through Railgun to cover their tracks. zkLend froze withdrawals and dangled a 10% white-hat bounty, but they’ve set a Valentine’s Day deadline before calling the crypto cops. Turns out love isn’t in the air—just frantic attempts to claw back stolen ETH. decrypt.

📼 Trump Taps a16z’s Quintenz for CFTC

Brian Quintenz, once a CFTC commissioner, could soon shape crypto rules with a lighter regulatory touch. He’s itching to boost the CFTC’s profile while big Gensler vibes over at the SEC. Meanwhile, Bitcoin dips again, because apparently even bullish politics can’t fix crypto’s mood swings. Cryptopotato.

🏦 Injective’s TradFi Index: On-Chain Stocks Without the Nine-To-Five

They now offer a perpetual market for hundreds of top equities, trading 24/7 with up to 25X leverag. No broker accounts or U.S. residency, just open a browser and pretend you’re the next Warren Buffett. Injective Protocol.

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ON-CHAIN ANALYITCS
You, Me, and MVRV 📊 

MVRV (Market Value to Realized Value) is a ratio that compares a crypto asset’s market cap to the total cost basis of all its coins, helping investors gauge whether it’s overvalued or undervalued. 🧠 

A high MVRV suggests holders are sitting on large unrealized gains, making a sell-off more likely, while a low MVRV indicates undervaluation and potential buying opportunities.

Crypto investors love it because it acts as a sentiment indicator, showing when the market is overheated or primed for accumulation. I refer to it as one of the ‘cheat codes’ in crypto. 🎮️ 

Dogecoin

Dogecion 7-day, 30-day, and 90-day MVRV Ratio Charts – Click to enlarge.

Analysis

Short-termers are on standby. Any minor price bump could be the excuse they need to sell. That dynamic often suppresses big rallies because those who held for a week or less may exit at the first sign of green.

Longer-term holders are even more in the hole, which suggests a built-up supply of disappointed DOGE owners. If they get anywhere close to break-even, they might bail out. That overhead supply can stall major breakouts.

Outlook

• Best-Case Scenario: A spike in social media interest (or a certain billionaire’s offhand tweet) unleashes a short squeeze. The 7-day MVRV crowd pockets some gains, and the 30/90-day group breathes a sigh of relief.

• Likely Reality: Negative MVRV often hints at undervaluation, but that narrative needs new buyers. If hype is MIA, we’ll see sideways action or a slow bleed until something big changes sentiment.

AAVE

AAVE MVRV-Z Score – Click to enlarge.

For AAVE, I’m using Glassnode’s MVRV-Z instead of Santiment’s MVRV (which was used for Doge). What’s the difference between the two? I’ll keep it short and sweet:

Santiment’s MVRV = Focuses on relative profit/loss for different timeframes, helping to gauge short-term trader behavior.

Glassnode’s MVRV-Z Score = A volatility-adjusted version that highlights extreme market conditions for identifying long-term tops and bottoms.

Santiment’s version is more tactical, while Glassnode’s Z-score is more strategic.

Analysis

That early January run-up to 1.5 on the MVRV-Z Score put the market within earshot of the “overextension” conversation. It wasn’t a blow-off top, but it was enough to get short-term speculators salivating.

The subsequent dip to around 0.8 indicated a return to earth. Whales and other large holders—ever so patient—likely offloaded coins onto that rally, pinning down momentum.

Now, with the MVRV-Z bouncing around 1.0, we have a classic indecisive market. Sellers aren’t exactly fleeing, but buyers aren’t swarming, either. It’s that uneasy truce before one side decides to test the waters again.

Outlook

• Bullish Case: A drive above MVRV-Z = 1.2 or higher in February could reignite the rally, pushing short-term holders back into “why-not-double-down?” mode. There’s always room for a fresh hype cycle, especially if broader market sentiment turns friendly.

• Bearish Twist: If MVRV-Z slips below 0.5, watch for negative chatter. Anyone who bought near January’s short-lived peak might bail en masse, weighing on price action.

THORchain

RUNE MVRV-Z Score – Click to enlarge.

Analysis

A negative MVRV-Z Score often means the market is undervalued relative to historical norms. But “undervalued” doesn’t always mean “about to moon.” It just means RUNE holders might be collectively nursing losses—especially if they bought when the price was flirting with $7 or $8. RUNE is more like RUINED em i rite?

When MVRV-Z sits this far below zero, any positive news can spark a relief rally. At the same time, these battered positions may rush to sell the moment they see a decent bounce, capping any breakout.

Outlook

Best-Case Scenario: A surprise catalyst (protocol upgrade, big partnership, or just random hype) triggers a short squeeze. The deeply negative MVRV-Z Score catapults toward zero or beyond, giving bag-holders a shot to exit gracefully. But damn if that flattening out over the last few days doesn’t look promising!

Likely Reality: Without fresh capital or bullish headlines, RUNE may drift sideways—maybe even retest lows. Sellers on any bounce remain plentiful, especially those looking to salvage losses from the big drop.

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NEWS IN THREE SENTENCES
Metaverse, NFT, & Gaming News 🎮️

🌊 Flow’s January: Hackathons, DAOs, and Bridges Galore

They added LayerZero, Stargate, and Axelar to zip assets across 100+ chains, while their DeFi scene zoomed past $10M in monthly volume. Flow-based hackathons are churning out AI this and cross-chain that, with sports collectibles setting new records. If you’re still sleeping on Flow, wake up—apparently, the entire Web3 world is dropping in. Flow.

❤️ XO: AI-Driven App Where You Find Soulmates, Not Bots

XO wants to fix loneliness by mixing AI, story-based matchmaking, and token rewards on SKALE’s fee-free network. They’ve got 1.5 million users who prefer real conversations over endless swipes, plus a “humanity verification” system to keep out catfish. If you’re sick of ghosting, you might as well let an AI Wingman orchestrate your next heartfelt DM. SKALE.

🌉 Virtuals Protocol Jumps to Solana

Now you can scoop $VIRTUAL on Solana, swap it for prototype agents, and shuttle it back and forth via Stargate. Agent tokens end in “…virt,” a 1% sentient tax kicks money back to creators, and liquidity is set up on Meteora. Automation’s in the works, but for now someone’s pressing buttons manually. Virtual’s X.

⚡ Flare Fair Teams Up With Layer3 for $100K in Quests

They’re calling it a crash course in bridging and lending, where you earn FLR and some fancy “CUBE” tokens for being a DeFi try-hard. Complete four quests or keep a daily streak going to siphon from a $100K reward pool. If you’re not bridging USDC or staking by day three, you’re leaving free loot on the table. Flare Network.

NEWS IN THREE SENTENCES
DeFi, DEX, and Lending Protocol News 🏦

⚙️ Balancer v3: Full-Speed Upgrades

Now strutting its stuff on Arbitrum with boosted pools, hooks, and custom AMMs so devs can rewire your liquidity. Partnerships with Lido, Aave, and more promise stablecoins and stakers some extra yield. Expect a juicy incentive program soon—because nothing says “use our product” like a pile of tokens. Balancer.

🚀 Balanced’s January Overhaul

They’ve upgraded relays, solvers, and cross-chain liquidity—translation: they’re smoothing out the rough edges for DeFi wanderers. You can now provide liquidity straight from your chain, while cross-chain BALN staking got quietly shelved for “later.” ICON.

🔒 Zodia Custody + Polymesh: Regulators Meet Real-World Assets

Zodia Custody just teamed up with Polymesh to stick “real-world assets” on a blockchain that won’t make Wall Street’s lawyers faint. They’re bragging about identity compliance and on-chain settlement to keep institutions happy. Basically, they want to prove crypto can play by the rules without feeling like a glorified game of Hot Potato. Polymesh.

⏰ UMA’s “P4” Means ‘Dude, You Proposed Too Soon’

UMA’s oracle punishes anyone who tries to settle a market before the event’s actually done. It doesn’t matter if you’re 99% sure Team X is about to win; if you propose early, you lose your bond. That’s the big oracle no-no—timing is everything, and “almost done” doesn’t cut it. UMA.

🚀 Unichain Mainnet: DeFi’s New Playground

Uniswap Labs dropped Unichain as a speedy, cheap L2 for DeFi die-hards who can’t stand slow transactions. Everyone from Circle to Coinbase is piling in, so expect stablecoins, bridging, and a mountain of tokens. They promise near-instant finality, minimal fees, and a future where cross-chain swaps feel as easy as scouring Netflix for something decent. Uniswap.

LINKS
Links That Don’t Suck 🔗

🫂 President Trump swaps BTC-e operator convicted of money laundering, Alexander Vinnik, in prisoner exchange with Russia

🤔 Ex-Activision boss forgets name of “bad acquisition” behind project Gotham Racing, Blur And Geometry Wars

💶 Crypto.com can now expand services to all European Economic Area Member States

💲 US inflation pushes Bitcoin ETF outflows, but Ethereum investors buy the dip

😺 I’m lucky to be alive after sustaining ‘car crash injuries’ tripping over my cat

🔕 Bybit CEO explicitly refuses to list the PI token, Bitget deletes some info

🐖 Pork gelatin powers biodegradable robot arm for delicate tasks

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Author Disclosure: The author of this newsletter holds positions in ADA, LTC, IMX, WMT, COPI, MIN, AGIX, ALGO, DOGE, ZEC, AVAX, XLM, XTZ, and NEAR. 📋