Crypto Market

BTC and ETH Market Insight

The cryptocurrency market has seen a significant drop over the last few days after a failed consolidation. BTC is now around $77,000, with support forming at $75K and $85K as resistance. ETH has mirrored this direction almost exactly, momentum has shifted drastically from neutral to partially positive to negative, with a clear down trend being seen in recent price action.  

The main drivers of these recent sharp reversals stem from a combination of macroeconomic and risk-off factors. 

Kevin Warsh’s nomination as Fed Chair is considered as the core trigger, which the market interpreted as hawkish signal that favors tighter monetary policies and less liquidity. Warsh’s political and economic views differ largely from Powell's, he has reinforced his view for much aggressive QT to shrink the balance sheet, creating ‘room’ without losing the grip on inflation for a rate cut which aligned his assertion of ‘inflation is a choice’ made by central banks through monetary control. 

He had criticized Powell for failing to anticipate inflation spike and now argues for active interest rates cuts to accommodate the productivity gains from AI advancement, simultaneously allowing the economy to grow faster without reigniting inflation risks. As a result, the USD (DXY) and short-term Treasury yields spiked shortly after the announcement in anticipation less easy money ahead. This reduces the appeal of non-yielding assets like crypto, equity, gold and silver, which thrive in weak-dollar environments. 

The debasement trade, geopolitical factors and industrial demands initially drove the parabolic rally in precious metals, pushing gold (XAU) and silver (XAG) to $5,595 and $121 respectively. As in every cycle, overextended assets and crowded positioning led to violent unwind of profit taking, triggering cascading liquidations across leveraged platforms that recently added XAU and XAG as trading pairs, such as Binance and Hyperliquid. Leveraged positions make the reversal sharper when macro narrative flipped against speculation. 

Geopolitical escalations such as Iran’s key oil hub explosion and Trump’s ongoing tariff threats, fueled broader risk aversions, prompting traders to rotate capital from high beta assets to low risk ones like cash and short term bonds (precious metals initially benefited but have now corrected as well after an insane run). A classic risk-off spiral ensued, exacerbated by thin weekend liquidity and cross-asset repricing. 

In summary, last week felt like a flush phase of overreacting to the news and resulted in leverage destruction and shaking out weak hands but not necessarily entering a full bear market. If macro condition stabilizes, a rebound could follow, retesting the resistance in short order. While some view this as a discount opportunity to accumulate high potential assets before the next real crypto rally, traders and investors should remain cautious given persistently high volatility and unpredictable conditions.

Upcoming Macro Calendar - Source: Trading Economics

Options Market

BTC and ETH options markets reflected defensive sentiment amid a major $8.8 billion Deribit expiry on January 30, with BTC's put-call ratio rising to 0.72 (max pain $88k) and ETH's at 0.68 (max pain $3k), as heavy put flows signaled hedging against further downside after price drops to $83k BTC and $2.7k ETH. Implied Volatility rose in tandem with Realised Volatility as the broad selloff across multiple asset classes continued to weigh. ETF netflows accelerated outflows, totaling ~$1.49 billion for BTC and $327 million for ETH over Jan 26-30, led by BlackRock and Fidelity redemptions amid rotation to metals. Skew deepened bearishly with one-week put premiums bid 15 vol points over calls for both assets, suggesting heightened defensive hedging.

Altcoins and Blockchain News

• U.S. President Trump: Kevin Warsh to be appointed as the new Federal Reserve Chairman.
  
  
• Gold records the largest single-day drop in 40 years, silver plunges over 36% to set a new record.
  
  
• U.S. federal government shuts down again as multiple departments close due to budget impasse.
  
  
• Jupiter announces global on-chain real-world payment feature, Jupiter Global, which will support on-chain payments, fiat payments, and more.
  
  
• Tether's net profit surpasses $10 billion in 2025, with gold reserves reaching $17.4 billion.
  
  
• Japan plans to classify XRP as a regulated financial product by Q2 2026.
  
  
• Step Finance suffers a major hack, with multiple treasury and fee wallets compromised; approximately 261,854 SOL tokens (~$30 million) were unstaked and transferred.
  
  
• A senior UAE royal has secretly acquired a 49% stake in Trump's World Liberty Financial for $500 million, according to market sources.
  
  
• World Gold Council survey: 95% of central banks plan to continue buying gold, while the U.S. dollar’s share of global forex reserves falls below 60%.
  
  
• Optimism community passes OP buyback proposal, allocating 50% of Superchain’s net revenue for regular buybacks.

Macro

The major benchmarks finished the week mixed after the Fed held the rate steady as expected: the DJIA lost 0.4%, the S&P 500 added +0.3%, and the Nasdaq shed 0.2%. The Chinese stock market finished the week with slight movement: the Shanghai Composite Index shed 0.44%, the CSI 300 edged up 0.08% and the Hang Seng index added +2.38%.