Bitcoin’s 10 AM mystery deepens

February 18, 2026

 

Reading time: 5 minutes

Bitcoin’s “10 AM dump” rumors meet AI credit fears

Key points:

  • Bitcoin faces macro risk warnings as ETF flows slow and rumors of coordinated “10 AM” selloffs circulate.

  • Arthur Hayes argues BTC’s divergence from tech stocks signals an AI-driven credit shock that could trigger large-scale Fed money printing.

News - Bitcoin’s recent volatility is being viewed through two developments highlighted in market commentary.

First, macro strategists have raised caution about broader risk conditions. Arthur Hayes described Bitcoin as the “global fiat liquidity fire alarm,” noting its decline from $126,000 to near $67,000 while the Nasdaq 100 remained relatively stable. He argued this divergence signals a potential AI-driven credit destruction event. 

In his model, a 20% reduction in the US knowledge workforce could result in roughly $557 billion in consumer credit and mortgage losses, pressuring banks and forcing Federal Reserve liquidity intervention.

Separately, Bloomberg Intelligence macro strategist Mike McGlone stated that Bitcoin has reverted toward a long-term mean near $66,000 and warned that declining crypto prices may be “front-running a bit of reverse wealth effect,” reflecting potential tightening liquidity conditions.

Rumors have also circulated across crypto trading circles that certain institutional desks may be triggering sharp Bitcoin selloffs shortly after US markets open around 10 a.m. Eastern Time. These claims remain unverified, though observers have pointed to repeated patterns since late 2025.

ETF flows and institutional positioning - US spot Bitcoin ETFs recorded $104.9 million in net outflows in the latest session, while trading volume declined to just over $3 billion from a $14.7 billion peak earlier this month.

Despite the drawdown, US spot ETFs still hold approximately $85 billion in assets, representing more than 6% of Bitcoin’s supply. Analyst Markus Thielen noted that 55% to 75% of BlackRock’s IBIT may be held by market makers and arbitrage-focused hedge funds maintaining hedged positions rather than outright bullish exposure.

Jane Street disclosed $276 million in IBIT purchases in Q4 2025, bringing its holdings to more than 20 million shares. A Hong Kong-based firm also reported a $436.2 million IBIT position.

AI boom, crypto lag - While AI social mentions reached record highs and global AI funding surged more than 75% year over year in 2025, AI-related crypto tokens have declined more than 16% over the past month, according to sector data.

XRP Ledger activates permissioned DEX as price signals split

Key points:

  • XRP Ledger activated a permissioned DEX for regulated institutions, expanding its institutional DeFi toolkit.

  • Price action remains divided between structural selling pressure and multiple bottoming indicators near $1.12.

News - The XRP Ledger has activated the XLS-81 Permissioned DEX amendment, allowing regulated institutions to create gated trading venues directly onchain. Unlike the open native XRPL exchange, the new model restricts who can place and accept orders, enabling compliance controls tied to KYC and AML requirements.

The rollout follows last week’s activation of XLS-85 Token Escrow, which extends conditional settlement beyond XRP to trustline-based tokens and Multi-Purpose Tokens, including stablecoins such as RLUSD. According to the update, the two features together provide a more complete toolkit for regulated finance use cases such as tokenized funds, stablecoin FX rails, and regulated secondary markets.

While infrastructure evolves, XRP price action reflects competing forces.

Selling pressure vs accumulation signals - XRP remains down 44% over the past year, with analysts flagging persistent sell pressure on the XRP/KRW pair on Upbit. A study of 82 million trades suggests net negative cumulative volume delta every month for the past 10 months, with an estimated 3.3 billion XRP in net selling, valued near $5 billion. Upbit balances have climbed above 6.4 billion XRP, approaching 10% of circulating supply.

At the same time, smaller whales holding between 1 million and 10 million XRP accumulated 20 million tokens, while exchange net position change flipped to -63.84 million XRP on February 17, signaling large outflows.

Technically, a head-and-shoulders pattern shows a neckline near $1.44, with $1.42 acting as key support. A break could target $1.12. However, funding rates fell to -0.028% near the recent low, open interest dropped 55% from early January peaks, and the 90-day spot taker Cumulative Volume Delta (CVD) flipped positive.

Spot XRP ETFs recorded inflows 53 out of 59 days, with cumulative inflows reaching $1.23 billion.

The reported data shows expanding institutional infrastructure on XRPL alongside mixed technical and onchain signals for XRP price.

Peter Thiel exits ETHZilla as Ether treasury firms diverge

Key points:

  • Peter Thiel’s Founders Fund fully exited ETHZilla, selling its entire 7.5% stake.

  • Ether treasury firms show contrasting moves between liquidations and continued accumulation.

News - Peter Thiel’s Founders Fund has fully divested from ETHZilla, according to a recent SEC 13G amendment filing showing zero ownership by the end of 2025. The fund had previously disclosed a 7.5% stake in August 2025, representing 11,592,241 shares valued near $40 million at the time.

ETHZilla, formerly 180 Life Sciences, pivoted to an Ether treasury strategy in July 2025 after raising $425 million, later seeking another $350 million via convertible bonds to expand holdings. At its peak, the company held more than 100,000 ETH.

As markets weakened in October, ETHZilla sold roughly $40 million in Ether for buybacks and later liquidated 24,291 ETH for $74.5 million in December to repay debt, leaving approximately 69,800 ETH on its balance sheet.

Diverging treasury strategies - Ethereum fell 28.4% in Q4 2025, declined 17.7% in January 2026, and dropped another 18.1% in February. The sustained decline coincided with pressure on digital asset treasury firms.

Trend Research sold 651,757 ETH for about $1.34 billion, locking in an estimated $747 million realized loss.

BitMine Immersion Technologies disclosed last week that it purchased 45,759 ETH, bringing its total holdings to 4.37 million ETH valued at $8.68 billion. Despite Ethereum trading 60% below its 2025 peak of $4,946, BitMine Chairman Tom Lee described 2026 as a “defining year for Ethereum,” citing tokenization, AI integration, and layer-2 adoption as key drivers.

Staked ETF revenue model expands - BlackRock’s upcoming staked Ethereum ETF, ETHB, will distribute 82% of staking rewards to investors while retaining 18% for BlackRock and Coinbase. The fund plans to stake between 70% and 95% of its Ether holdings to balance yield generation with redemption requirements.

The reported filings and corporate disclosures show ongoing changes in how institutions hold and generate yield from Ether exposure.

Wall Street files election ETFs while courts escalate prediction market fight

Key points:

  • Bitwise, Roundhill, and GraniteShares filed for election-linked prediction market ETFs amid record sector growth.

  • A federal appeals court denied Kalshi’s request to pause Nevada enforcement, intensifying the state versus federal jurisdiction dispute.

News - Bitwise, Roundhill Investments, and GraniteShares have filed for election-focused exchange-traded funds (ETFs) tied to US political outcomes.

Bitwise submitted amendments on February 17 to launch six products under a new “PredictionShares” platform, covering the 2028 presidential race and the 2026 House and Senate midterms. The funds would invest primarily in CFTC-regulated event contracts, using swaps and binary structures that typically settle at $1 if an outcome occurs and $0 if it does not. 

Filings warn the products are “highly risky” and unsuitable for investors who do not fully understand the strategy.

The filings coincide with record activity in prediction markets. Monthly trading volume reached $15.4 billion in January, with transactions surpassing 122 million and monthly users climbing to 830,520.

Liquidity meets legal risk - Industry participants expect strong liquidity from hedge funds and quant traders, citing growing demand for election-linked contracts. At the same time, critics warn that political event markets may create manipulation risks or opportunities for trading on non-public information.

The Digital Chamber launched a Prediction Markets Working Group advocating for the Commodity Futures Trading Commission to maintain primary oversight. CFTC Chair Michael Selig has publicly asserted federal jurisdiction over event contracts, arguing they are commodity derivatives rather than gambling.

State regulators have taken enforcement actions against certain platforms offering event contracts.

Nevada moves against Kalshi - The Ninth Circuit Court of Appeals denied Kalshi’s emergency request to pause Nevada enforcement, clearing the way for the Nevada Gaming Control Board to pursue civil action over alleged unlicensed wagering.

Nevada argues Kalshi’s sports event contracts fall under state gaming law. Kalshi maintains it operates under exclusive federal CFTC authority and may seek emergency relief from the US Supreme Court.

The filings and court rulings reflect ongoing legal proceedings and regulatory debate over how prediction markets are classified and overseen in the United States.

Did you know?

  • Japan’s largest bank is testing stablecoin issuance: Mitsubishi UFJ Financial Group, Japan’s largest bank, confirmed it is exploring the issuance of fiat-backed stablecoins through its Progmat Coin platform, positioning major Japanese banks to enter regulated tokenized payments infrastructure.

  • U.S. courts are treating crypto as property in bankruptcy proceedings: Multiple federal bankruptcy rulings have reaffirmed that customer-held crypto assets can be treated as property of the estate depending on custody structure, reshaping how exchanges draft user agreements after the FTX collapse.

  • Argentina’s Bitcoin mining runs on stranded gas: Several Argentine mining operations are now using excess natural gas from oil fields that would otherwise be flared, converting stranded energy into Bitcoin mining revenue amid the country’s inflation crisis.

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Top 3 coins of the day

World Liberty Financial (WLFI)

Key points:

  • WLFI rebounded to $0.121 after reversing from the $0.086 lower Bollinger Band, reclaiming the mid-band near $0.115 on strong daily gains.

  • The Squeeze Momentum histogram showed shrinking red bars while volume surged sharply, signaling easing bearish pressure alongside heavy participation.

What you should know:

WLFI staged a sharp recovery after sliding toward the $0.105–$0.100 region earlier this month. The latest session closed near $0.121, with price pushing above the Bollinger mid-band at $0.115 and briefly testing highs around $0.125. The upper band near $0.145 now serves as the next dynamic resistance, while $0.115 acts as immediate support if the bounce consolidates.

Momentum conditions improved as deeply negative Squeeze Momentum bars began contracting, indicating that downside force was fading. The rebound coincided with a 226.61% surge in 24-hour trading volume to approximately $364.86M, confirming strong capital inflows behind the move rather than a low-liquidity spike.

Holding above $0.115 keeps the short-term recovery intact, while sustained pressure toward $0.140–$0.145 would signal a broader reversal attempt.

Monero (XMR)

Key points:

  • XMR traded at $337 after defending the $320 area, extending its rebound from the $290 February low.

  • Parabolic SAR positioned below price near $305 while the Awesome Oscillator showed green bars forming, signaling waning bearish momentum.

What you should know:

After the sharp unwind from January’s highs, Monero spent early February stabilizing near $290 before gradually regaining traction. The recent advance carried price back toward $337, with the $320 zone emerging as a near-term floor.

Trend bias shifted as the Parabolic SAR flipped beneath the candles, indicating that downside pressure has eased for now. Meanwhile, the Awesome Oscillator’s deeply negative readings began contracting, with early green bars emerging, highlighting a transition from aggressive selling to momentum normalization rather than a full bullish expansion.

Trading activity during this recovery has been steady but not elevated, implying measured participation rather than breakout-style accumulation.

Maintaining position above $320 preserves the constructive structure, while $360 represents the next overhead resistance to watch.

Polygon (POL)

Key points:

  • POL climbed to $0.109 after reclaiming the 9-day SMA at $0.102, recovering from its recent slide below $0.095.

  • RSI improved to 51.02 while daily volume expanded, signaling renewed participation without overbought conditions.

What you should know:

POL gradually regained footing after dipping toward the $0.090–$0.095 zone earlier this month. The latest session held above $0.105 and maintained position above the 9-day SMA at $0.102, reflecting short-term trend stabilization. The moving average has begun turning upward, reinforcing the recovery attempt.

Momentum normalized as RSI rebounded from oversold territory and moved slightly above the neutral 50 mark. This shift suggested improving balance between buyers and sellers rather than aggressive upside expansion. Volume also ticked higher, rising roughly 12.87% to about $71.99M, which added credibility to the bounce amid broader capital rotation into select altcoins.

As long as $0.105 and $0.100 remain intact as support, the structure favors continuation toward $0.115. Failure to hold $0.100 would weaken the current rebound setup.

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