Bitcoin, Ethereum Dip as Fed Decision and Trade Tensions Weigh on Crypto

I. Crypto Market Overview

Key Takeaways

Macro Environment

The Federal Reserve is expected to keep rates steady this week, with markets watching for policy signals amid heightened trade war fears after new US tariff threats. India is pushing BRICS CBDC cross-border payments to reduce dollar reliance, while Korea's delayed digital asset law adds to Asian market volatility.

Crypto Market

The crypto market saw mild declines over the past 12 hours, with Bitcoin down 0.78% at $88,610 and Ethereum down 0.84% at $2,926. Most major altcoins, including Solana (-0.52%), Arbitrum (-2.20%), and FET (-2.70%), also fell. Flare (+1.95%) and Pump.fun (+1.06%) outperformed, driven by ecosystem activity and new fund launches, while speculative momentum lifted Canton 63% on high volume.

Today's Outlook

No major token unlocks or protocol upgrades are scheduled for today, but market focus remains on macro risk events, including US Fed policy expectations and ongoing trade tensions, which may drive volatility across crypto assets.

Fear and Greed Index

0.00% Annual Percentile

35 Neutral

Total Crypto Market Cap

$3.00T

0.66%

Total Market Trading Volume

$60.38B

31.83%

Altcoin Season Index

16.67%

Quarterly Percentile

27 / 100

Total Futures Market Open Interest

3.61B

0.15%

Futures

516.06B

17.20%

Perpetuals

II. Industry Updates

Macro-economic Policies

The Federal Reserve is set to announce its first interest rate decision of 2026 this week, with markets expecting rates to remain at 3.50%-3.75%. This decision is highly anticipated by crypto traders, as dovish signals could boost BTC and DeFi liquidity, while a hawkish stance may sustain current risk aversion.

Renewed trade war fears have emerged after President Trump threatened a 100% tariff on Canadian goods, increasing global market uncertainty. Such trade tensions typically drive volatility in crypto markets, impacting Bitcoin price and cross-border stablecoin flows.

The Reserve Bank of India has urged the government to leverage its 2026 BRICS chairmanship to promote CBDC-based cross-border payments among BRICS nations. This initiative aims to reduce dollar dependence and could reshape global payment rails, potentially increasing demand for digital assets and stablecoins.

Israel's debt-to-GDP ratio rose to 68.6% in 2025 due to increased security spending. Ongoing fiscal measures to balance security and economic stability may influence global risk sentiment, indirectly affecting crypto market flows and investor appetite for digital assets.

Korea has delayed its digital asset law amid disputes over stablecoin issuer and exchange caps. The uncertainty has contributed to increased volatility in KRW and a surge in USD stablecoin trading, affecting DeFi liquidity and stablecoin market dynamics in Asia.

Cryptocurrency Regulatory Trends

The U.S. SEC has dismissed its lawsuit against Gemini after full investor repayment, signaling a more pragmatic approach to crypto enforcement and boosting market confidence.

China's tax authorities are intensifying scrutiny on overseas crypto transactions, classifying gains as taxable property transfer income, which may increase compliance costs for investors.

South Korea's Financial Intelligence Unit is preparing stricter anti-money-laundering rules for crypto, including mandatory sender and recipient info for all transactions, aiming to align with global standards.

The UK FCA now allows crypto ETNs in ISAs and pensions, but only through niche Innovative Finance ISAs, reflecting a cautious but evolving regulatory stance toward retail crypto investment.

Stablecoin regulation remains a global focus, with U.S. and EU rules classifying payment stablecoins as cash instruments, prohibiting interest payments and shaping issuer business models.

Canton (CANTON): Canton surged 63% in 24h, leading Top Gainers, driven by high trading volume of $14.97M and strong speculative momentum despite limited public news.

Flare (FLR): Flare rose 1.95% in 24h with $5.01M volume, supported by new ProofRails builder bounties and ecosystem activity, boosting developer engagement and network use.

PUMP.fun (PUMP): PUMP.fun gained 1.09% in 24h, with $207.56M trading volume and over 113K holders, fueled by high liquidity, active trading, and recent $3M fund launch for startups.

Smart Money Movements

ARK Invest increased its crypto equity exposure by acquiring $9.4M in Coinbase shares, $9.2M in Circle, and $3.2M in Bullish, signaling continued institutional confidence.

GameStop transferred 4,710 BTC worth $420M to Coinbase Prime, raising speculation of a potential treasury exit and reflecting a possible $75M–$85M realized loss at current prices.

Bitcoin whale wallets holding over 1,000 BTC collectively added 104,340 BTC, raising total holdings to 7.17M BTC, the highest in four months, per Santiment data.

A whale liquidated $11M in PUMP tokens on Binance, securing a 40% profit and realizing approximately $3.15M in gains after a month-long accumulation.

A single entity acquired 4,300 XAUt tokens valued at $21.71M via seven wallets, with each token purchased at $5,049, highlighting continued smart money interest in tokenized gold.

Events to Watch

Jan 27 (Tue)

US Federal Reserve holds policy meeting; XRP Ledger mainnet amendments activate, node operators must upgrade to v3.0.0.

Jan 28 (Wed)

US FOMC announces policy-rate decision with Powell's press conference; 181M GRASS tokens and 140M tokens unlock, potentially impacting markets.

Jan 29 (Thu)

US initial jobless claims data for January will be released, providing key labor market insights.

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