The crypto market opened the week on a cautious note, edging higher but lacking real conviction as political and institutional risks weighed heavily on sentiment. Total crypto market capitalisation rose 0.6% to $3.2 trillion, yet the broader picture reveals fragility: 63 of the top 100 cryptocurrencies declined over the past 24 hours, and trading volume fell to $87.2 billion, well below recent weekly averages.
At the heart of the uncertainty lies an unusual and potentially far-reaching development — a criminal investigation into U.S. Federal Reserve Chair Jerome Powell. While the legal outcome remains unclear, analysts argue the real risk lies elsewhere.
“The key issue is not whether the prosecution ultimately succeeds, but whether markets begin to believe that the Federal Reserve is no longer fully insulated from politics,” Bitunix analysts warned.
Bitcoin Sensitive to Institutional Shock
Bitcoin has reacted cautiously to the news. After briefly pushing above $92,000 during Asian trading, BTC surrendered those gains and is now trading around $91,271, up a modest 0.7% on the day. Ethereum followed a similar pattern, rising 1.2% to $3,128.
According to Petr Kozyakov, CEO of Mercuryo, bitcoin’s price action mirrors a broader risk-off mood across global markets. As tensions rise between Fed Chair Powell and President Donald Trump — alongside persistent geopolitical risks — investors are once again seeking refuge in traditional safe havens such as gold and silver.
Yet bitcoin has shown notable downside resilience, a point echoed by Bitunix analysts. When confidence in central bank independence or dollar credibility is questioned, decentralized assets like bitcoin often gain a narrative-driven risk premium, even if short-term price action remains muted.
Altcoins Show Selective Strength
While the overall market remains mixed, certain sectors stood out. Solana (SOL) led the top-10 gainers with a 3.6% jump to $141, fueled by renewed activity in the memecoin ecosystem. Lido Staked Ether (STETH) also posted modest gains.
On the downside, XRP fell 2.1%, Dogecoin slipped 2%, and BNB edged lower by 1.2%. Among the top 100 tokens, Pol (POL) recorded the steepest drop, sliding 11.3%, while Provenance Blockchain (HASH) lost 9.5%.
Privacy coins, however, continue to defy the broader hesitation. Monero (XMR) surged 18.1% to $569, reinforcing a trend that dominated the latter part of 2025. Canton (CC) and MYX Finance (MYX) also posted double-digit gains, highlighting pockets of speculative interest despite a cooling market.
ETF Outflows Add to Pressure
Institutional sentiment remains shaky. U.S. spot Bitcoin ETFs recorded $249.99 million in outflows, while Ethereum ETFs saw $93.82 million exit on the same day. In the first full trading week of the year, investors pulled nearly $750 million from these two ETF categories combined.
Only one Bitcoin ETF — Fidelity’s — posted inflows, while BlackRock and Bitwise recorded significant outflows. Notably, the $79,000 level now represents the average purchase price of U.S. Bitcoin ETFs. A drop toward that zone could place many institutional holders at break-even, increasing the risk of further selling pressure if support fails.
Regulation and Global Shifts
Regulatory uncertainty added another layer of complexity. Coinbase warned it may withdraw support for major crypto legislation if U.S. Senate negotiators introduce restrictions on stablecoin rewards beyond disclosure rules, raising tensions ahead of a key January 15 markup.
In contrast, sentiment improved in Asia after reports that South Korea may end its nine-year ban on corporate crypto investment, potentially allowing listed companies and professional investors to trade digital assets under new guidelines.
Levels to Watch and Market Outlook
Bitcoin has traded within a $89,799–$94,420 range over the past week, down 2.1% overall. A sustained move above $91,520 could open the door to $93,011 and $94,800, while failure to hold $91,000 risks a pullback toward $89,241 or $87,921.
Ethereum faces similar consolidation. A close above $3,180 may send ETH toward $3,250–$3,300, while a drop below $3,100 increases the likelihood of a test under $3,000.
Market sentiment continues to drift lower. The Crypto Fear and Greed Index remains at 40, hovering just inside neutral territory but edging closer to fear. Analysts broadly agree this is not a rally, but a consolidation phase marked by choppy price action as traders wait for clearer macroeconomic and geopolitical signals.
For now, crypto markets appear to be holding their breath — caught between institutional uncertainty, political risk, and the long-term narrative that positions bitcoin as a hedge against exactly this kind of instability.