WEEKLY CRYPTO MARKET UPDATE

Week Ending 29 January 2026

---

HEADLINE

BTC US$82,840. Extreme Fear Grips Markets

---

IN MARKETS

Global risk assets faced renewed pressure this week as persistent inflation concerns and geopolitical tensions weighed on investor sentiment. Traditional equity markets experienced volatility, with technology sectors particularly affected, creating spillover effects into digital assets. The correlation between crypto and broader risk assets remained elevated, with institutional flows reflecting a defensive positioning across portfolios.

Bitcoin traded at US$82,840, down 6.1% over the past 24 hours, reflecting broader market weakness. Ethereum declined 6.9% to US$2,750, while major altcoins experienced similar drawdowns. XRP fell 6.2% to US$1.76, and Solana dropped 6.4% to US$115. The synchronized decline across major assets suggests systematic deleveraging rather than idiosyncratic factors.

Market volatility indicators spiked during the session, with realized volatility reaching levels not seen since Q4 2025. Trading volumes increased substantially across spot and derivatives markets, indicating active position management by institutional participants. Bitcoin dominance held relatively steady, suggesting the selloff affected the broader market rather than representing rotation between assets.

The Fear & Greed Index registered 16, firmly in "Extreme Fear" territory. This reading represents a significant deterioration from previous weeks and historically has preceded either capitulation events or contrarian buying opportunities. Institutional sentiment surveys indicate elevated hedging activity and reduced net long positioning across major trading desks.

---

FROM THE OTC DESK

The primary driver of this week's price action appears to be a confluence of macroeconomic headwinds rather than crypto-specific catalysts. Regulatory developments in the United States continue to evolve, with policy discussions around digital asset frameworks gaining momentum in Congress. However, the immediate market impact stems from broader risk-off sentiment affecting all growth-oriented assets.

Institutional participants report increased volatility in basis trades, with funding rates compressing significantly as leveraged positions were unwound. The spot-futures basis narrowed to levels suggesting reduced speculative interest and more cautious positioning. Options markets showed elevated implied volatility, particularly in near-dated contracts, indicating uncertainty about near-term price direction.

OTC Desk Activity:

• Net selling pressure from macro funds reducing digital asset exposure in line with broader portfolio deleveraging across risk assets
• Increased hedging flows through options markets, with institutional desks purchasing downside protection and rolling existing positions to lower strikes
• Stablecoin rotation into short-duration Treasury products as cash management strategies shift toward capital preservation over yield optimization

---

KEY ECONOMIC CALENDAR

Monday, 3 February, 23:45 SGT – US Manufacturing PMI Final (Consensus 50.3) Wednesday, 5 February, 03:00 SGT – FOMC Interest Rate Decision (Consensus hold at 4.25-4.50%) Wednesday, 5 February, 03:30 SGT – Federal Reserve Chair Powell Press Conference Thursday, 6 February, 21:30 SGT – US Initial Jobless Claims (Consensus 220k) Friday, 7 February, 21:30 SGT – US Nonfarm Payrolls (Consensus +165k) Friday, 7 February, 21:30 SGT – US Unemployment Rate (Consensus 4.1%) Wednesday, 12 February, 21:30 SGT – US CPI Year-over-Year (Consensus 2.9%)

---

IN HEADLINES

Congressional Momentum Builds for Comprehensive Crypto Legislation

Legislative efforts to establish a comprehensive regulatory framework for digital assets gained traction this week as multiple committees advanced proposals addressing market structure, stablecoin regulation, and custody standards. House Financial Services Committee members from both parties signaled growing consensus on key provisions, including clearer jurisdictional boundaries between the SEC and CFTC. The proposed legislation would establish registration requirements for digital asset exchanges, mandate segregation of customer assets, and create a pathway for banks to provide custody services without additional capital requirements. Industry participants view the legislative progress as potentially transformative for institutional participation, as regulatory clarity has been cited as a primary barrier to larger allocations by pension funds and endowments. The timeline for passage remains uncertain, with Senate consideration expected in Q2 2026, but the bipartisan nature of discussions suggests higher probability of eventual enactment than previous attempts.

Asian Markets Navigate Divergent Regulatory Approaches

Regulatory developments across Asian jurisdictions continue to shape regional market dynamics, with Hong Kong, Singapore, and Japan pursuing distinct approaches to digital asset oversight. Hong Kong's Securities and Futures Commission approved three additional spot Bitcoin ETF applications this week, bringing the total number of approved products to eight and reinforcing the jurisdiction's positioning as a regional hub for institutional crypto products. The new ETFs are expected to launch in Q1 2026, with combined initial assets under management projected at US$500 million. Meanwhile, South Korean authorities announced enhanced monitoring of cryptocurrency exchanges following concerns about market manipulation in smaller-cap tokens. The Financial Services Commission implemented new reporting requirements for transactions exceeding US$50,000, aimed at improving market surveillance capabilities. Japan's Financial Services Agency continued its measured approach, approving two additional exchanges for operation while maintaining strict capital and operational requirements. The divergent regulatory strategies reflect different policy priorities, with Hong Kong emphasizing market development, Korea focusing on investor protection, and Japan maintaining its historically cautious stance.

Institutional Product Innovation Accelerates Despite Market Volatility

Major financial institutions continued launching new digital asset products this week, demonstrating sustained institutional interest despite current market conditions. A consortium of European banks announced plans for a tokenized money market fund utilizing blockchain settlement infrastructure, targeting institutional clients seeking yield on cash positions while maintaining exposure to distributed ledger technology. The product, expected to launch in Q2 2026, will be denominated in euros and backed by short-duration government securities. Separately, a leading asset manager filed for regulatory approval of an actively managed crypto fund employing quantitative strategies across spot and derivatives markets. The fund would be available to qualified purchasers and represents a shift toward more sophisticated investment approaches beyond simple buy-and-hold strategies. Options markets also saw innovation, with a major derivatives exchange introducing micro-sized Bitcoin options contracts designed for retail and smaller institutional participants. The new contracts, representing 0.1 BTC per contract, lower the barrier to entry for options strategies and provide more precise hedging capabilities.

DeFi Protocol Governance Debates Highlight Decentralization Challenges

Governance controversies within major decentralized finance protocols this week underscored ongoing tensions between decentralization ideals and practical decision-making requirements. A prominent lending protocol faced community backlash after a governance proposal to modify risk parameters passed with minimal voter participation, raising questions about the legitimacy of decisions made with low engagement. Token holders representing less than 5% of total supply approved changes to collateral requirements, prompting debates about minimum quorum thresholds and the concentration of voting power among large holders. The incident highlights persistent challenges in decentralized governance, where voter apathy and token concentration can undermine the democratic principles underlying these systems. Several protocols responded by proposing governance reforms, including time-weighted voting mechanisms and delegation systems designed to increase participation. From an institutional perspective, governance risks represent a key consideration in protocol evaluation, as unclear or unstable governance processes can create unexpected changes to protocol economics and risk profiles.

Stablecoin Adoption Metrics Show Continued Growth in Emerging Markets

On-chain data analysis revealed accelerating stablecoin adoption in emerging market economies, particularly in regions experiencing currency volatility and capital controls. Transaction volumes for USD-denominated stablecoins in Latin America, Africa, and Southeast Asia increased 34% quarter-over-quarter, according to blockchain analytics firms. The growth reflects stablecoins' utility as a store of value and medium of exchange in economies with high inflation or limited access to dollar-denominated banking services. Remittance corridors showed particularly strong adoption, with stablecoin-based transfers offering cost advantages over traditional money transfer services. Average transaction fees for stablecoin remittances remained below 1%, compared to 6-8% for conventional services. Institutional observers note that this organic adoption in emerging markets represents a distinct use case from speculative trading activity in developed markets, potentially providing more sustainable long-term demand. However, regulatory responses vary significantly by jurisdiction, with some governments embracing the technology while others impose restrictions due to concerns about capital flight and monetary policy effectiveness.

Mining Sector Consolidation Continues Amid Profitability Pressures

The Bitcoin mining industry experienced further consolidation this week as smaller operators faced profitability challenges from elevated energy costs and increased network difficulty. A mid-sized publicly traded mining company announced plans to acquire a distressed competitor's mining facilities at a significant discount to replacement cost, marking the third major acquisition in the sector this month. The transaction includes approximately 50,000 mining machines and hosting infrastructure, adding 5 exahash per second to the acquirer's total hash rate. Industry analysts note that current market conditions favor well-capitalized operators with access to low-cost power and efficient equipment, while marginal miners face pressure to exit or consolidate. Network hash rate reached new all-time highs despite price weakness, indicating that efficient operators continue expanding capacity. The mining difficulty adjustment mechanism responded accordingly, increasing difficulty by 3.2% in the most recent adjustment. For institutional investors, mining sector consolidation creates opportunities in both equity investments and equipment financing, though careful due diligence on power costs and operational efficiency remains essential.

---

Until next week, happy trading!