WEEKLY CRYPTO MARKET UPDATE

Week Ending 21st January 2026

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HEADLINE

BTC US$90k. Markets stabilize amid extreme fear.

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IN MARKETS

Global risk assets exhibited mixed performance this week as markets digested persistent inflation concerns and geopolitical tensions. Traditional equity indices traded sideways while the US dollar maintained strength against major currencies, creating headwinds for risk-on positioning across digital assets.

Bitcoin closed the week at US$90,017, posting a modest +2.2% gain over the past 24 hours but remaining range-bound within the US$88,000-92,000 corridor established in recent weeks. Ethereum traded at US$3,018 (+2.7%), continuing to underperform on a relative basis as layer-2 scaling solutions capture increasing transaction volume. XRP demonstrated notable strength at US$1.96 (+4.0%), benefiting from ongoing regulatory clarity developments, while Solana maintained momentum at US$131 (+3.8%), supported by sustained network activity and DeFi protocol growth.

Market microstructure indicates reduced conviction among participants, with spot volumes declining approximately 15% week-over-week and perpetual funding rates compressing toward neutral territory. Bitcoin dominance held steady near 58%, suggesting limited capital rotation into alternative assets.

The Fear & Greed Index registered 24 (Extreme Fear), marking a significant deterioration from neutral readings observed in December 2025. This sentiment extreme historically presents contrarian buying opportunities for institutional allocators with medium-term horizons, though near-term price discovery remains challenged by macro uncertainty.

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FROM THE OTC DESK

The primary market-moving development this week centers on regulatory policy positioning as the US administration enters its second year. While specific legislative initiatives remain under discussion, institutional participants are monitoring potential framework developments that could impact custody requirements, stablecoin classifications, and exchange-traded product expansion beyond spot Bitcoin and Ethereum offerings.

Price action reflects this regulatory uncertainty, with BTC consolidating below the psychologically significant US$100,000 level for the seventh consecutive week. The US$88,000-92,000 range has absorbed substantial two-way flow, with realized volatility compressing to 45% annualized—well below the 60-70% historical average. This volatility compression suggests either an imminent directional break or continued range-bound conditions pending macro catalysts.

OTC Desk Activity:

• Net selling pressure from long-term holders taking profits near US$90,000 resistance, with block trades averaging 50-150 BTC concentrated during Asian and European sessions.
• Institutional hedging flows increasing via options markets, with three-month put skew steepening as asset managers implement downside protection ahead of February macro data releases.
• Stablecoin rotation into short-duration US Treasury products accelerating, reflecting 4.5% risk-free rates and reduced conviction in near-term crypto beta opportunities.

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KEY ECONOMIC CALENDAR

Monday, 27 Jan, 23:30 SGT – US Durable Goods Orders (Consensus +0.8%) Wednesday, 29 Jan, 21:15 SGT – US ADP Employment Change (Consensus +125k) Thursday, 30 Jan, 03:00 SGT – FOMC Interest Rate Decision (Consensus: Hold at 4.25-4.50%) Thursday, 30 Jan, 03:30 SGT – Fed Chair Powell Press Conference Friday, 31 Jan, 21:30 SGT – US Core PCE Price Index (Consensus +2.8% YoY) Friday, 31 Jan, 21:30 SGT – US Employment Cost Index Q4 (Consensus +0.9%) Monday, 3 Feb, 21:30 SGT – US Non-Farm Payrolls (Consensus +160k)

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IN HEADLINES

Regulatory Framework Discussions Continue in Washington

Policy developments remain at the forefront of institutional attention as market participants await clarity on digital asset regulatory architecture. While the scraped news sources indicate ongoing discussions around policy initiatives, concrete legislative proposals have yet to materialize into actionable frameworks. The absence of definitive regulatory guidance continues to weigh on institutional capital deployment, particularly among traditional asset managers seeking clear custody and compliance pathways. Market participants are closely monitoring potential developments around stablecoin legislation, which could unlock significant institutional adoption if properly structured. The regulatory overhang contributes to current range-bound price action, with institutional desks reporting increased client inquiries regarding compliance infrastructure and reporting requirements ahead of anticipated framework announcements.

Bitcoin ETF Flows Show Mixed Patterns

US spot Bitcoin ETF products continue to experience variable daily flows, reflecting broader institutional uncertainty around tactical positioning. While specific flow data was not detailed in the scraped sources, market structure suggests that the initial enthusiasm following ETF launches in early 2024 has normalized into more measured allocation patterns. Institutional participants are increasingly treating Bitcoin ETFs as portfolio diversifiers rather than momentum trades, with flows correlating more closely to traditional risk-on/risk-off dynamics. The maturation of the ETF market has improved price discovery and reduced spot-derivative basis dislocations, though volumes remain concentrated in the top three products by AUM. Asset managers report that client conversations have shifted from "whether" to allocate to "how much," indicating structural acceptance despite near-term price uncertainty.

Layer-2 Scaling Solutions Capture Growing Market Share

Ethereum's layer-2 ecosystem continues to demonstrate robust growth, with transaction volumes on Arbitrum, Optimism, and Base collectively exceeding mainnet activity by approximately 3:1 ratios. This scaling success presents a double-edged dynamic for ETH price performance: while network utility expands significantly, fee revenue accruing to mainnet validators has compressed by over 60% from 2024 peaks. Institutional analysts note that this value capture question remains unresolved, contributing to ETH's relative underperformance versus BTC (down approximately 15% on the ETH/BTC ratio year-to-date). However, the layer-2 expansion validates Ethereum's roadmap execution and positions the ecosystem favorably for institutional DeFi applications requiring high throughput and low transaction costs. Several major financial institutions are reportedly exploring private layer-2 deployments for securities settlement and tokenized asset infrastructure.

Asian Market Developments Signal Regional Divergence

Digital asset regulatory approaches across major Asian markets continue to diverge, creating distinct opportunities and challenges for institutional participants. While specific developments were limited in the scraped sources, market intelligence suggests that Hong Kong's progressive licensing regime for virtual asset service providers is attracting substantial institutional interest, with multiple global exchanges and asset managers establishing regional headquarters. Conversely, regulatory uncertainty in other jurisdictions has created fragmented liquidity pools and compliance complexity. Japanese institutional investors are reportedly increasing allocations to Bitcoin and Ethereum through regulated trust products, while Korean retail participation remains elevated despite periodic regulatory scrutiny. This regional fragmentation requires sophisticated institutional participants to maintain multiple custody and trading relationships, increasing operational complexity but also creating arbitrage opportunities across venue and jurisdictional spreads.

Solana Network Activity Sustains Momentum

Solana continues to demonstrate strong fundamental metrics, with daily active addresses exceeding 5 million and DeFi total value locked maintaining stability above US$8 billion despite broader market consolidation. The network's high-throughput architecture and low transaction costs have attracted significant developer activity, particularly in consumer-facing applications and payment infrastructure. Institutional interest in SOL has increased correspondingly, with several multi-strategy funds establishing meaningful positions based on network growth fundamentals rather than purely speculative positioning. The upcoming network upgrade scheduled for Q1 2026 is expected to further enhance performance characteristics, though validators and infrastructure providers are monitoring implementation risks. Solana's ability to maintain network stability following previous outage concerns has improved institutional confidence, though concentration risks around validator distribution remain a consideration for large allocators.

Stablecoin Market Dynamics Reflect Macro Conditions

The aggregate stablecoin market capitalization has stabilized near US$185 billion, with USDT and USDC maintaining dominant positions at approximately 65% and 25% market share respectively. Notably, stablecoin issuance growth has decelerated significantly from 2024 levels, reflecting reduced speculative activity and tighter financial conditions. Institutional participants report increased focus on stablecoin reserve transparency and regulatory compliance, with several major issuers publishing enhanced attestation reports and pursuing formal licensing in key jurisdictions. The emergence of yield-bearing stablecoin products has created new dynamics in the market, with protocols offering 4-6% yields on USD-denominated deposits attracting capital from traditional money market funds. However, regulatory uncertainty around whether such products constitute securities remains unresolved, creating hesitancy among risk-averse institutional allocators. The stablecoin infrastructure continues to mature as a critical component of digital asset market plumbing, with daily settlement volumes exceeding US$50 billion across major chains.

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Until next week, happy trading!