Crypto Market Slides as BTC, ETH Lead Broad Decline; ISM PMI in Focus

I. Crypto Market Overview

Key Takeaways

Macro Environment

The US dollar strengthened on key economic data, pressuring crypto risk appetite. The EU's DAC8 directive expands crypto tax reporting, likely impacting cross-border DeFi flows. Persistent inflation in Turkey and Australia is driving local investors toward stablecoins and may dampen global crypto inflows.

Crypto Market

The crypto market saw broad declines over the past 12 hours, with BTC down 4.43% to $97,474 and ETH falling 9.27% to $3,144.86, as risk-off sentiment and ETF outflows weighed on prices. Altcoins also dropped, with FET (-12.59%), ARB (-11.73%), and STX (-10.96%) among the worst performers, while AI and Layer-2 sectors led losses amid sector rotation and weak spot demand.

Today's Outlook

The ISM Manufacturing PMI will be released today, providing a key gauge of US economic health and potentially influencing market sentiment and crypto volatility. No major token unlocks or on-chain events are scheduled for today based on available data.

Fear and Greed Index

22.00% Annual Percentile

40 Neutral

Total Crypto Market Cap

$3.15T

0.96%

Total Market Trading Volume

$96.08B

26.49%

Altcoin Season Index

75.00%

Quarterly Percentile

25 / 100

Total Futures Market Open Interest

3.13B

19.90%

Futures

825.17B

9.92%

Perpetuals

II. Industry Updates

Macro-economic Policies

The US dollar strengthened against the euro and yen as traders focused on key US economic data releases, impacting crypto market volatility and potentially delaying risk-on flows into BTC and DeFi assets.

Turkey's annual inflation reached 30.89% in December, with housing costs up nearly 50%, increasing pressure on local liquidity and potentially driving Turkish investors toward stablecoins and crypto hedges.

Economists expect the Reserve Bank of Australia to raise interest rates at least twice in 2026 due to persistent inflation, which could reduce global risk appetite and dampen capital inflows into crypto markets.

The European Union's DAC8 directive took effect on January 1, 2026, expanding tax data collection for crypto transactions, which may prompt portfolio rebalancing and affect cross-border DeFi activity.

President Trump announced $600 billion in tariff revenue for the US, signaling continued trade tensions that could increase global market uncertainty and drive safe-haven demand for Bitcoin.

Cryptocurrency Regulatory Trends

China's financial industry associations have declared RWA tokenization illegal, warning that both domestic and overseas operators may face legal consequences. This move increases regulatory risk for RWA projects and may deter cross-border DeFi activity.

The U.S. SEC will issue a crypto innovation exemption within weeks, aiming to align digital asset activities with existing laws and reduce regulatory uncertainty. This is expected to boost compliant innovation and support broader crypto adoption.

South Korea's crypto trading volume has dropped 80% year-over-year, attributed to stricter regulations and market consolidation. The regulatory environment is driving a shift from speculative trading to more stable, long-term investment strategies.

The U.S. CLARITY and GENIUS bills are set for discussion this month, with a recent SEC reshuffle indicating a potential shift in regulatory approach. Market participants anticipate increased institutional participation as regulatory clarity improves.

Virtuals Protocol (VIRTUAL): VIRTUAL surged over 19% in 24h, driven by renewed AI sector momentum and increased institutional interest in Base-native protocols, as reported by CoinJournal and CoinDesk.

Render Network (RENDER): RENDER jumped 15% in the last 24h, fueled by a broad AI token rebound and positive sentiment around decentralized GPU infrastructure, according to BanklessTimes and Bitget.

Stacks (STX): STX gained nearly 12% in 24h, supported by growing adoption of Bitcoin Layer-2 solutions and recent integration news, as highlighted by CoinDesk and Capital.com.

Smart Money Movements

Strategy increased its Bitcoin holdings by 1,286 BTC, investing $116 million last week, bringing its total to 673,783 BTC valued at $62.58 billion.

Metaplanet resumed Bitcoin purchases, acquiring 4,279 BTC for $451 million at $105,412 each, raising its total holdings to 35,102 BTC.

Bitmine purchased 32,977 ETH worth $104 million last week, boosting its total Ethereum holdings to 4,143,502 ETH, valued at $13.08 billion.

A whale staked 33,499 ETH valued at $106.17 million, incurring an unrealized loss of $7.36 million based on current market prices.

Jump Trading transferred 789 BTC, approximately $73.3 million, to an unknown wallet, signaling a significant on-chain movement.

Events to Watch

Jan 5 (Mon)

The ISM Manufacturing PMI, a key U.S. economic indicator, will be released, providing insight into economic health and market sentiment.

Jan 6 (Tue)

HYPE token unlock: 12.46 million tokens ($328M, 3.61% of supply) and 1.2 million tokens for team ($320M); Eurozone, UK, and US Services PMI data releases; Richmond Fed President Tom Barkin speech.

Jan 7 (Wed)

Eurozone inflation data for December 2025 will be released; US ISM Services PMI, JOLTS job openings, and ADP employment change data to be published; Fed Governor Michelle Bowman speech.

Jan 8 (Thu)

Xterio (XTER) unlocks $2.01M (44.35% of market value); US Initial Jobless Claims and Consumer Credit data releases, indicating economic stress levels.

Jan 9 (Fri)

US Non-Farm Payrolls report, labor market data, and Baby Shark Universe (BSU) token unlock ($2.3M, 9.28% of market value) will be released, potentially impacting Fed policy and crypto markets.

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