Ndax Wealth: Market Report Feb 11

The capitulation event we've been anticipating may have materialized. Bitcoin's decline to approximately 60,400 USD on February 5 coincided with record activity in U.S. spot Bitcoin ETFs, which processed roughly $14.07 billion in aggregate trading volume, their highest single-day total since launching in January 2024. BlackRock's IBIT accounted for more than $10 billion of that turnover as the ETF complex absorbed an estimated $1.25 billion in net outflows over the course of the week. Elevated volume alongside sustained redemptions is consistent with forced risk reduction among institutional and traditional allocators, particularly as Bitcoin remains materially lower over the past three months and down meaningfully year-to-date. CoinDesk

Market structure beneath the move suggests a significant reset rather than a buildup of new leverage. Aggregate open interest across major perpetual futures venues has fallen sharply since October, while funding rates turned negative across large-cap assets, conditions typically associated with deleveraging. Price has stabilized following dip buying near recent lows, though broader signals remain mixed. Altcoins broadly underperformed and amplified volatility, with dispersion widening across sectors. At the same time, longer-term adoption themes (particularly value-referenced crypto assets, tokenized assets, and on-chain financial infrastructure) continue to draw institutional interest, often concentrating activity in large-cap smart-contract platforms and critical middleware. Until Bitcoin can sustain acceptance above recent rebound levels, near-term direction is likely to remain sensitive to external macro forces, including shifts in rate expectations and currency dynamics, rather than crypto-specific catalysts alone. Vaneck

Japan delivered the electoral surprise of the year, with Prime Minister Sanae Takaichi's LDP securing a historic supermajority of 316 of 465 lower house seats. Markets responded with conviction: the Nikkei 225 breached 57,000 for the first time ever, surging nearly 4% on Monday as the Takaichi trade ignited across asset classes. The playbook is straightforward: expansionary fiscal policy driving stronger equities, weaker yen, and rising JGB yields. For global macro positioning, this creates both tactical opportunities and portfolio hedging considerations, particularly as yen weakness amplifies carry trade dynamics. The Guardian

In the U.S., the labor market is telegraphing genuine softness that markets are only beginning to price appropriately. ADP's January print of 22,000 new jobs missed estimates by more than half, while JOLTS data showed openings plummeting to 6.54 million, the lowest reading since September 2020. This trilogy of deterioration supports the case for additional Fed cuts, though the timing remains contingent on this week's critical data releases. This Wednesday's delayed NFP report (expectations: 70,000 adds, unemployment rising to 4.5%) and Friday's CPI print (consensus: headline easing to 2.5% year-over-year) will determine whether Powell's stabilization narrative holds or if the data forces a more dovish pivot. Treasury Secretary Bessent's efforts to calm concerns around the Warsh Fed nomination provided Friday's risk-on catalyst, though questions around liquidity provision remain unresolved. Reuters

Last week's action crystallized a profound regime shift beneath the surface of headline indices. While the Nasdaq endured its worst weekly performance since November, shedding 1.9% amid AI-driven existential angst around software obsolescence and CapEx sustainability, the Dow Jones powered to fresh all-time highs above 50,000, gaining 2.6% in a remarkable flight to value and tangible assets. The 1,200-point Friday surge alone, fueled by Nvidia (+7.8%), Caterpillar (+7.1%), and a roster of industrial and financial names, underscored how quickly sentiment can pivot when growth narratives fracture. Markets reassessed whether the staggering CapEx commitments from hyperscalers ($200 billion from Amazon, $175-185 billion from Alphabet) represent visionary infrastructure builds or return-dilutive capital traps. CNBC

The week ahead carries significant implications for this nascent rotation. Software earnings from Salesforce, Oracle, and Adobe will stress-test whether AI truly poses an existential threat or merely represents the latest narrative overshoot. The iShares Expanded Tech-Software Sector ETF remains down 22% year-to-date, which creates either a value trap or a generational entry point depending on earnings quality and forward guidance. Meanwhile, Bank of America's research on 60/40 rebalancing flows offers critical insight: since 2021, portfolio rebalancing has injected $37 billion monthly into fixed income while trimming equities. With equity return expectations moderating sharply (BofA projects just 4.5% S&P 500 price appreciation in 2026) and only two Fed cuts anticipated, these flows are poised to decelerate materially. Reuters

Rates, FX, and real assets remain tightly linked through one theme: credibility and volatility pricing. Yen dynamics are back in focus after Japan’s election shock, while the dollar’s path is being shaped by shifting rate expectations and a dense U.S. data week. In commodities, a notable development has been the sharp repricing in precious metals, with gold moving above $5,000 and heightened volatility in silver causing traditional “safe‑haven” assets to behave more like liquidity instruments than long‑term hedges. Energy remains headline-sensitive (Iran/Russia-Ukraine), but the broader story is that macro hedging demand is still expressing itself most clearly through FX volatility and metals. Reuters 

• MicroStrategy Posts $12.4B Q4 Net Loss Tied to Bitcoin Valuation Decline; Maintains 713,502 BTC Holdings at $76,052 Average Entry CoinDesk
• BlackRock's IBIT Logs Record $10B Single-Day Trading Volume as Price Tumbles 13%; Total AUM Stands at $56B The Block
• Bernstein Reaffirms $150K Bitcoin Target for 2026, Frames Selloff as Confidence Crisis Rather Than Fundamental Breakdown The Block
• European Parliament Backs Dual Issuance of Digital Euro in Both Online and Offline Formats Per ECB Blueprint Bloomberg

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