Slippery conditions

For all of the angst over the threat of trade wars and nagging inflation, the U.S. stock market wound up concluding last week on a high. Yesterday, the market was closed. Stock futures as of this morning were greening up.

Also rising right now is the yield on the 10-year treasury, suggesting more investors are content to hole up in a safe haven. In Europe, bonds sold off yesterday as yields there rose on suspicions that government spending is likely to increase.

And that's because at the Munich Security Conference over the weekend, NATO Secretary General Mark Rutte confirmed the alliance would reach a new agreement for higher defense spending targets when members next gather in June. The issue of NATO spending has been a source of simmering tension between the U.S. and Europe. It's coming to a boil.

Earlier today in Riyadh, the Saudi capital, U.S. and Russian officials met for talks on ending the war in Ukraine. European allies watched worrisomely from the sidelines as Moscow made a fresh demand that NATO disavow a membership promise given to Ukraine in 2008 (Reuters).

At 7:28 a.m. (EST), the 10-year yield was 4.513%, reflecting a rise of 0.037%, or nearly four basis points.

Meanwhile, in crypto, No. 18 Litecoin gained 2.5% in 24 hours to reach nearly $128. No other Top 20 coin resided in the green, per CoinGecko.

Sure, potential catalysts are lurking. And Bitcoin may well be tightly coiled, ready to spring.

But the crypto market has lost more ground to begin the back stretch of a short month. As of Tuesday, at 6:42 a.m. (EST), the total market was $3.28T, down 3% in the past 24 hours.

BTC fell slightly (-0.4%) while most Top 30 coins were down 2%-6% with Solana (-8%) leading the losers. Traders seem to have at least momentarily soured on the Solana ecosystem, Cointelegraph explained, pointing to a spike in short SOL positions in the wake of the LIBRA debacle which involved a splash of hype from Argentine President Javier Milei, a wave of suspected insider selling and a tsunami of retail losses totaling some $4.4B.

U.S. regulatory climate relief could come into play one of these days but there's overriding macro consternation in the near-term. Last week brought some anxiety with respect to data showing consumer prices creeping upward. But, at the same time, macro analysts seized on evidence that the Federal Reserve's preferred inflation gauge, the Personal Consumptions Expenditures (PCE) index, could wind up showing signs of slowing when the next batch of numbers comes out on Feb. 28.

The official "Fed minutes" report (describing in more detail the policy discussions from the most recent Fed meeting) will be released later today. Volatility in crypto could ensue if investors can glean some morsels of insight pertaining to rate-cut prospects.

Ethereum ETFs have enjoyed an upswing in activity so far in February. Nine ETH products listed in the U.S. have garnered a cumulative net inflow of $393M, according to CoinDesk, citing data from Farside Investors.

This figure is 7x the ETH ETF inflows seen in January, and these funds, as a group, experienced net outflows on, surprisingly enough, just two trading days.

By comparison, 11 Bitcoin ETFs saw net outflows of $376M so far this month.

Since flirting with sub-$2K price levels to start the month, ETH's spot price has soldiered back to as high as $2,832. That was an intraday high achieved last night. ETH's much-coveted $4K mark — unseen since December — has faded from consciousness. CoinGecko's chart tells us ETH $4K was indeed an actual thing two months ago and yet it somehow feels like a false memory.

Some of the inflows into ETFs could be outright bullish directional plays, CoinDesk said. Part of the inflow trend would seem to connect with a popular "carry trade," involving purchases of spot ETH ETFs alongside short positions in CME futures tied to ETH.

Into the ETH market outlook stew comes new research from Santiment showing that increasing amounts of ETH are being moved off exchanges, which paints a scene depicting "hodlrs" hunkering down for the long haul.

“ETH continues to move into cold wallets at a shocking pace,” Santiment said.

A mere 6.4% of the available ETH supply remains on exchanges (Cointelegraph).