Markets Drop 1.6% with AXS Hit Hardest

Crypto markets traded lower on February 5, with the average tracked asset down 1.6% and breadth negative at 88 assets up versus 179 down. The tape was risk-off despite a net-positive news mix of 24 positive items against 13 negative, a divergence that pointed to positioning and liquidity as the dominant drivers rather than headlines.

The day’s key macro signal was renewed pressure on bitcoin as it slid toward $70,000, with CoinDesk citing on-chain indicators consistent with bear-market conditions and traders leaning toward the Federal Reserve holding policy in April. That combination matters because it tightens the feedback loop between rates expectations and crypto beta: when the market stops pricing near-term easing, high-duration assets reprice quickly, and crypto tends to amplify the move. Bitcoin fell 7.2% on the day, and the broader complex followed, consistent with a deleveraging move rather than idiosyncratic protocol risk.

A second focal point was evidence of supply overhang and institutional distribution signals around the selloff. Reports that Bhutan continued moving bitcoin to trading firms and exchanges as prices fell added to the perception of forced or opportunistic selling into weakness, while a separate data point showing the Coinbase premium at a yearly low suggested diminished U.S. bid support at the margin. The market reaction was consistent with that interpretation: bitcoin led down, and large-cap alts with higher reflexivity to spot flows and derivatives positioning, including BNB at -8.4% and ETH down as much as 7.7%, underperformed the already weak average.

The third story was the steady normalization of bank and institutional crypto access even as prices fell, highlighted by commentary on UBS’s plans following reports of bitcoin and ethereum trading for wealthy clients and separate coverage describing a “fast follower” approach to tokenization. The near-term price impact was limited, but the relevance is structural: incremental distribution through private banks tends to broaden the buyer base over time, yet it does not insulate the market from drawdowns when liquidity conditions tighten. Ethereum’s decline alongside these headlines underscored that adoption narratives were not sufficient to offset the day’s macro-led risk reduction.

Sector performance showed a broad high-beta unwind, with gaming and metaverse-linked names hit hard as Axie Infinity (AXS) fell 8.4% and Immutable (IMX) dropped 7.8%, moves consistent with investors cutting discretionary growth exposures first. Smart-contract and platform tokens also sold off sharply, with Solana down between 7.1% and 8.3% across cited prints and BNB down 8.4%, while compute/AI-adjacent exposure was weak as Render (RNDR) fell 7.5%. The lone notable outlier was Fantom (FTM), which printed both an 8.0% decline and a separate 7.4% gain in the feed, suggesting high intraday volatility and potential venue-to-venue dispersion rather than a clean, single-direction move.

Several of the largest movers lacked a clear catalyst, including AXS, BNB, IMX and RNDR, which all moved without clear catalyst and tracked the broader risk-off impulse. Conversely, some constructive institutional and infrastructure headlines did not translate into immediate price support, including tokenization optimism in Hong Kong and institutional plumbing stories such as Fireblocks and Stacks on bitcoin DeFi, which read as medium-term positives but were drowned out by the selloff. Even asset-specific news that could have been supportive, such as Stellar’s institutional derivatives-liquidity vaults, failed to prevent XLM from falling 6.9%, reinforcing that correlation and liquidity dominated idiosyncratic narratives.

The main takeaway is that February 5 traded like a liquidity event: negative breadth, large-cap underperformance, and headline-positive stories failing to arrest declines. For February 6, the market’s near-term pivot remains whether bitcoin can stabilize around the low-$70,000 area and whether U.S. spot demand signals improve, with the Coinbase premium and any further sovereign or large-holder transfer activity likely to be watched closely. A second watchpoint is whether SOL’s break below $100 attracts follow-through selling or bargain demand, because sustained weakness in high-beta platforms would argue the market is still de-risking rather than bottoming.