Empire Why Is Crypto Crashing? | Weekly Roundup
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Feb 6, 2026 Josh Lim, Co-head of Markets at FalconX, a crypto prime broker with deep institutional flow and liquidity insight. He breaks down the recent market sell-off and who’s buying at the margin. They cover Ethereum L2 roadmaps, why risk-taking is muted this year, shifts in institutional interest, and reactions to Kyle Samani leaving Multicoin.
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Use Options Vol To Read Market Fear
- Watch implied volatility and front-end vol moves to gauge fear and demand for protection in crypto options.
- Use spikes from ~40 vol to mid‑60s as signals retail and levered participation are shifting materially.
Thin Leverage Raised Fragility
- Historically low implied vol and compressed futures basis signaled thin levered participation before the sell-offs.
- That lack of leverage made the market more vulnerable to large negative shocks when they occurred.
Early-Year Narratives Failed To Materialize
- Many start‑of‑year bullish narratives (redemptions easing, DEX/M&A tailwinds) didn't materialize as expected.
- That failure removed expected liquidity sources and left the market more defensive.