Crypto Market Slides as BTC, ETH Lead Declines; Key Upgrades and US Data Ahead

I. Crypto Market Overview

Key Takeaways

Macro Environment

Morgan Stanley's spot Bitcoin and Solana ETF filings highlight rising institutional adoption and regulatory acceptance. The US SEC and CFTC, now led by Republican crypto advocates, are accelerating crypto-friendly policies. Easing inflation in Germany and robust growth in India and China support global risk sentiment, potentially benefiting crypto flows.

Crypto Market

The crypto market saw broad declines over the past 12 hours, with BTC down 4.4% to $97,474 and ETH falling 9.3% to $3,144, pressured by weak risk sentiment and ETF outflows. Altcoins also dropped, with SUI down 10.8%, WIF down 9.8%, and XRP down 8.6%. Meme and DeFi sectors led losses, while no major tokens posted gains; selling was driven by risk-off flows and profit-taking after recent rallies.

Today's Outlook

Ethereum's Blob Capacity Upgrade today aims to reduce Layer 2 fees, while Stellar upgrades its testnet to Protocol 25. The US releases ISM Services PMI and ADP employment data, and the Eurozone publishes December inflation, all of which could drive volatility across crypto and risk assets.

Fear and Greed Index

8.00% Annual Percentile

49 Neutral

Total Crypto Market Cap

$3.19T

0.41%

Total Market Trading Volume

$136.72B

4.81%

Altcoin Season Index

54.55%

Quarterly Percentile

23 / 100

Total Futures Market Open Interest

2.74B

12.28%

Futures

825.44B

5.56%

Perpetuals

II. Industry Updates

Macro-economic Policies

Germany's December CPI fell to 1.8%, below expectations, signaling easing inflation. This could support a more accommodative ECB stance, potentially increasing Eurozone liquidity and benefiting crypto asset flows.

Eurozone consumer confidence declined in December, while the ECB held rates steady at 2%. Persistent uncertainty and cautious optimism may limit risk appetite, but stable policy supports crypto market resilience.

India's GDP growth is projected at 6.9% for FY27, driven by strong consumption and tax reforms. Robust economic expansion in India may boost local crypto adoption and DeFi activity.

China's economy is forecast to grow 4.7% in 2026, according to Citi. Continued Chinese growth supports global risk sentiment, which can enhance capital inflows into digital assets and crypto markets.

Venezuela will deliver up to 50 million barrels of oil to the US, potentially easing global energy prices. Lower energy costs can reduce inflationary pressures, indirectly supporting risk assets including cryptocurrencies.

Cryptocurrency Regulatory Trends

Morgan Stanley has filed with the SEC to launch spot Bitcoin and Solana ETFs, signaling growing institutional adoption and regulatory acceptance, which could boost investor confidence and market liquidity.

The U.S. SEC and CFTC are now fully controlled by Republican crypto advocates, accelerating crypto-friendly regulatory actions and reducing enforcement, which may encourage further institutional participation.

PwC is expanding its crypto services in response to new U.S. stablecoin regulations and the GENIUS Act, reflecting a shift toward greater regulatory clarity and mainstream integration of digital assets.

The Senate Banking Committee has scheduled a market structure markup vote for January 15, potentially impacting future U.S. crypto regulatory frameworks and shaping the compliance landscape for digital asset firms.

MSCI has decided to retain digital asset treasury companies in its indexes, reflecting ongoing acceptance of crypto holdings in traditional finance and supporting the legitimacy of crypto-related public companies.

dogwifhat (WIF): WIF surged 22.7% in 24h to $0.48, driven by strong meme coin momentum and $451M trading volume, making it the top gainer among major tokens.

SUI (SUI): SUI jumped 19.5% in 24h to $2.00, with $2B in trading volume, fueled by DeFi ecosystem growth and increased on-chain activity.

Render (RNDR): RNDR rose 16.1% in 24h to $2.46, supported by $281M trading volume and ongoing network upgrades in decentralized GPU rendering.

Smart Money Movements

BlackRock withdrew 7,146 BTC and 6,851 ETH from Coinbase in the past two days, totaling approximately $668.38 million in Bitcoin and $21.91 million in Ethereum.

Spot Bitcoin ETFs acquired $697 million worth of BTC yesterday, marking the largest single-day institutional purchase since October and signaling renewed institutional confidence.

Hyperliquid attracted a net inflow of $55 million in the last 24 hours, generating $1.1 million in fee revenue as capital shifted from Arbitrum, which saw over $25 million in outflows.

SharpLink earned 438 ETH in staking rewards last week, increasing its total accumulated staking rewards to 10,657 ETH, valued at approximately $1.4 million.

A transfer of 555 BTC, valued at $51.98 million, was executed from Coinbase Institutional to an unknown wallet, indicating ongoing large-scale movements by institutional investors.

Events to Watch

Jan 7 (Wed)

Ethereum will implement the Blob Capacity Upgrade, increasing per-block blob limits to reduce Layer 2 fees; Stellar will upgrade its testnet to Protocol 25 'Stellar X-Ray' at 21:00 UTC; US releases ISM Services PMI, ADP employment, and Eurozone December inflation data.

Jan 8 (Thu)

US initial jobless claims and consumer credit data will be released, providing insight into labor market and economic stress.

Jan 9 (Fri)

US December employment and Non-Farm Payrolls reports will be published, key for Federal Reserve policy; Bureau of Labor Statistics releases December jobs data.

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