The crypto market has slowed as investors take losses, with mining difficulty increasing by 14%. The Ethereum Foundation has presented an updated development plan for the network, alongside other news from the past week.

Market in the Red

Digital assets remain stagnant, with a negative trend. Over the past week, Bitcoin lost about 4%, and 25% over the last 30 days.

On Monday, the leading cryptocurrency traded around $70,000, but by Thursday, it had dropped to a local low of $65,000. By Sunday, the asset had recovered to $67,000.

Ethereum followed Bitcoin's lead, failing to hold the psychological level of $2,000, losing 5.5% in seven days.

Analysts at Glassnode noted that the price drop of Bitcoin to $60,000 exerted psychological pressure on long-term holders, comparable to the collapse of the Terra ecosystem in May 2022.

According to their data, the seven-day exponential moving average of the SOPR for this group of investors fell below 1, indicating that they began selling positions at significant losses—a rare behavioral change typically seen in deeper stages of a bear market.

Simultaneously, a decrease in inflows to trading platforms has been observed.

The correction in the crypto market has prompted many professional investors to shift to liquid assets or increase cash holdings in their portfolios, Bloomberg reported. This is also reflected in the outflows from U.S. Bitcoin ETFs, which have continued for the fifth consecutive week.

Technical analysts have identified the formation of a bearish pennant on the charts for both Bitcoin and Ethereum, indicating targets of $55,000 and $1,100, respectively.

The "pennant" forms when prices consolidate in a narrowing range after a sharp decline (the "flagpole"). A breakout below this formation typically leads to a new downward impulse, comparable in scale to the initial movement.

Other top-10 crypto assets also found themselves in the "red zone," with TRX being the only exception, gaining 3%.

The Crypto Fear and Greed Index remains at a low of 9 points.

The total market capitalization of digital assets decreased from $2.45 trillion to $2.45 trillion.

Bitcoin's dominance index stands at 56.6%, while Ethereum's is at 9.8%.

Mining Difficulty

On February 19, Bitcoin's mining difficulty increased by 14.73% to 144.4 T, marking one of the largest changes since 2021.

During the last recalculation, the metric dropped by 11% due to adverse weather conditions that temporarily halted operations for many large miners, causing fluctuations in the network's hash rate.

The current hash rate remains above 1 ZH/s.

While the hash rate has recovered after a brief decline, the hash price continues to fall, decreasing from $34 to $28 per PH/s per day over the week.

Despite the declining profitability, players with access to cheap energy continue to expand their capacities. For instance, unrealized profits from Bitcoin mining in the UAE reached $350 million.

However, some companies are taking different approaches. Miner Bitdeer reported selling all Bitcoin on its balance sheet. Previously, the firm had been slowly liquidating assets, but in the past week, it released 943.1 BTC onto the market.

Bitdeer has now surpassed MARA Holdings in hash rate, becoming the leader among public miners.

The second-largest company has recently closed a deal to acquire a 64% stake in AI infrastructure provider Exaion, reflecting the trend of major cryptocurrency miners diversifying their assets.

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Plans for Ethereum Protection

The Ethereum Foundation (EF) updated its roadmap for protocol development through 2026. The foundation has identified three main areas: scaling, improving UX, and protecting the base layer.

As part of the scaling plans, developers will focus on increasing L1 throughput and enhancing data accessibility. Key objectives include:

  • Gradual increase of the gas limit to 100 million and beyond. This will be implemented through the introduction of access lists at the block level (EIP-7928) and regular client performance testing;
  • Preparation for the Glamsterdam hard fork. This update will introduce an embedded PBS mechanism (ePBS, EIP-7732), revise transaction costs, and increase limits for BLOB objects;
  • Launch of an attester client based on zkEVM. This tool is planned for full use in the mainnet;
  • Storage optimization. Developers will focus on removing outdated data and transitioning to binary trees (statelessness architecture).

In terms of UX, the focus will shift to native account abstraction and cross-network interactions (interoperability).

According to developers, the previously adopted EIP-7702 was a significant milestone, but the ultimate goal is to make smart contract wallets a standard that operates without intermediaries and unnecessary gas costs. The next proposals—EIP-7701 and EIP-8141—will embed smart account logic directly into the protocol.

The base layer has become a new area of focus, aiming to preserve Ethereum's fundamental properties during scaling. Work will be conducted in three segments—security, censorship resistance, and stability.

Meanwhile, Ethereum's staking share reached a record 50%. The calculation of 50.18% (80.95 million ETH) is based on the historical issuance volume of the asset before the introduction of the burning mechanism. Currently, about 120 million ETH are in circulation.

At present, 37.1 million ETH are locked in the mainnet, accounting for 30.54% of the leading altcoin's supply. The number of active validators stands at 964,799.

Militarized AI

This week, the WSJ reported that the U.S. Army used the Claude chatbot from Anthropic in an operation to capture Venezuelan President Nicolás Maduro.

"We cannot comment on whether Claude or any other model was used in a specific operation—secret or otherwise. Any deployment of LLM—both in the private sector and government entities—must comply with our policy governing the deployment of neural networks. We work closely with partners to ensure compliance with regulations," a company representative stated.

However, using the model for such purposes contradicts Anthropic's public policy, which explicitly prohibits the use of AI for violence, weapon development, or surveillance organization.

The integration of Claude into the Department of Defense was made possible through Anthropic's partnership with Palantir Technologies. The latter's software is widely used by military and federal law enforcement agencies.

Journalists report that after the raid, an Anthropic employee inquired with a Palantir colleague about the specific role the neural network played in the operation to capture Maduro. The startup denied the claim, and WSJ journalists did not provide further details.

Following the news, Pentagon spokesperson Sean Parnell announced a review of relationships with the AI lab, although the Defense Department's relations with Anthropic had already been strained.

Axios, citing sources, noted that the U.S. military is pressuring four major AI companies (Anthropic, Google, OpenAI, and xAI) to allow the army to use technologies for "all lawful purposes."

Simultaneously, reports emerged that the recently merged SpaceX and xAI led by Elon Musk plan to develop software for autonomous Pentagon weaponry.

The firms are participating in a six-month tender with a $100 million fund aimed at creating advanced "swarm technology capable of translating voice commands into digital instructions and controlling multiple drones."

OpenAI is also supporting a bid from Applied Intuition, but it will be limited to a "mission control center" element that will translate commanders' voice commands into digital instructions.

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Crypto Payments in Belarus

Sputnik, citing the chairman of the National Bank of Belarus, Alexander Egorov, reported that self-employed individuals in the republic will be able to officially receive payments for their services in cryptocurrency.

"Previously, if a designer or programmer completed an order for a foreign client who offered payment in crypto, the person found themselves in a gray area, unable to legally deposit that money into their account or pay taxes on it. Now that barrier has been removed," he explained.

Payments in digital assets are planned to be conducted through crypto banks, which were legalized in January.

Such entities are defined as joint-stock companies—residents of the High-Tech Park from a special register of the National Bank. These companies will have the right to conduct operations with tokens alongside traditional services.

"Blockchain technology, combined with state regulation, provides a level of transparency that ordinary banks can only dream of," Egorov stated.

According to him, crypto banks will also issue cards for payments in regular stores. When paying, cryptocurrency will be automatically converted into Belarusian rubles at the current exchange rate.

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