Crypto markets brace for catalysts

Rachael LucasJan 29th 2026

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Introduction

This week in crypto, the market continued to absorb a complex mix of macro pressure, liquidity constraints, and infrastructure level stress. Bitcoin trades within a tight consolidation range following last quarter’s forced deleveraging, while ETF flows remain decisively negative across both BTC and ETH. Stablecoin redemptions accelerated, miners faced severe operational disruptions, and derivatives activity shifted toward macro-themed trades as volatility returned. Yet beneath the caution, the long-term bid from institutions persists, with strategic accumulators adding exposure into weakness. As crypto navigates thinner liquidity and a risk off environment, the question becomes whether Bitcoin can maintain key levels long enough for flows to stabilise.

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Price action on Australia’s digital asset exchange

This week saw a clear risk off tone across crypto markets on BTC Markets, with most major assets closing lower. Bitcoin led the downside, falling 3.30% to AU$126,493.70, reflecting broader caution as investors reduced exposure to higher risk assets. Ethereum underperformed expectations, slipping 1.15% to AU$4,263.20, suggesting buyers remain selective despite its relative resilience. XRP was the weakest of the majors, dropping 3.64% to AU$2.7083, as sentiment around large cap alts softened further.

The standout performer was GNT, which rose 7.28% to AU$0.3433, showing that pockets of demand still exist for smaller assets even in defensive conditions.

Overall market sentiment remains cautious. Total crypto market capitalisation sits at US$2.98 trillion, while Bitcoin dominance edged lower to 59.55%. That decline suggests capital is slowly rotating away from Bitcoin, but not yet with enough confidence to drive a broad altcoin recovery.

State of crypto

Bitcoin consolidates after heavy ETF outflows and deleveraging
Fed signals slower easing path, weighing on risk assets
Tether debuts regulated USA₮ as stablecoin redemptions surge
Arctic storms cut 250 EH/s from the Bitcoin network
Ethereum advances ERC8004 while battling ETF outflows
Market caution persists as liquidity thins and macro risk rises

Bitcoin holds its range despite ETF outflows

Bitcoin remains in consolidation mode after last year’s US$28B Binance liquidation glitch triggered a significant deleveraging across markets. Cathie Wood from Ark Invest noted this week that the worst of the forced unwinding appears to be behind us, with BTC likely to oscillate between US$80,000 and US$90,000 before its next directional move. But sentiment is still under pressure.

ETF flows highlight that tension, with crypto funds seeing US$1.73B in net weekly outflows. Bitcoin accounted for US$1.09B of that total, suggesting investors are unwilling to add risk until price firmly reclaims its realised price near US$86,600. Meanwhile, the US Federal Reserve commentary provided little relief. Rates were held at 3.5% - 3.75%, but officials signalled a slower pathway to easing, a stance that typically dampens appetite for high beta assets like crypto.

Despite the cautious macro backdrop, Bitcoin’s price action has been surprisingly resilient. Trading around US$90,000 into week’s end, the market appears to be digesting the combined impact of tighter liquidity, ETF outflows, and mining stress without significant breakdown. The real question is whether BTC can maintain its range until ETF flows stabilise or whether further pressure could drive a retest of US$84,000, now shaping up as the market’s key line in the sand.

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Stablecoins face redemptions as new US-regulated entrants emerge

The stablecoin landscape experienced one of its most active periods of the year, driven by both rapid redemptions and new product launches. Across major issuers, more than US$7B in stablecoins exited circulation over ten days, the sharpest contraction seen this cycle. This reduction in liquidity has historically preceded weaker crypto price action and adds to the defensive tone across markets.

Tether moved to reshape that narrative, launching USA₮, its first stablecoin issued under the US GENIUS Act framework. Sitting alongside USDC in the category of domestically regulated tokens, USA₮ marks a strategic shift for Tether as it courts the institutional market. Simultaneously, Fidelity entered the stablecoin arena with FIDD, a fully backed USD token issued via its national trust bank.

Beyond issuance, Tether’s long-term strategy continues to evolve. The company confirmed holdings of US$24B in physical gold and signalled plans to expand its reserves into Bitcoin and bullion as a hedge against fiat debasement. That positioning underscores a broader shift in the digital asset economy, stablecoins are increasingly behaving like global liquidity rails rather than just crypto-native trading instruments.

But the competition for institutional flows is intensifying. Redemptions from centralised platforms, stress events such as the SwapNet exploit, and ongoing debates over approval security indicate that stablecoins remain both a foundational and fragile pillar of market structure.

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Bitcoin mining struggles through Arctic storms

Bitcoin’s mining sector endured one of its most severe operational disruptions of the year as Arctic storms cut nearly 250 EH/s from the network. With major US mining hubs curtailing activity to stabilise regional power grids, block times stretched beyond 12 minutes. The immediate effect: transaction settlement slowed, mempools expanded, and fee markets briefly spiked.

Mining economics have also flipped negative in the US. With operating costs hovering around US$94,700 per BTC mined, miners are now underwater at spot prices. If weather conditions extend into February, this could force some miners to liquidate reserves, adding temporary sell side pressure.

A difficulty reduction is expected in early February and should restore healthier network dynamics, but the broader trend remains worrying. Hash rate concentration in weather sensitive regions continues to expose the network to seasonal volatility. Yet institutional accumulation is counterbalancing that instability. Strategy added 2,932 BTC this week, bringing its total to more than 712,000 BTC, or 3.2% of supply.

Mining stress remains a risk factor to watch, especially if energy markets tighten or if weather-driven curtailments become more frequent.

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Ethereum advances AI identity standard amid mixed flows

Ethereum saw a week of mixed signals. On the bearish side, ETF products recorded US$630M in outflows and broader market sentiment weighed on price action. Staking levels remain near 30%, but the absence of fresh inflows is limiting upward momentum.

Yet innovation on Ethereum continues at pace. The introduction of ERC8004 represents a significant step forward for AI agent identity on chain. The new standard enables verifiable, portable reputations for AI entities across applications, opening the door to cross platform agents, automated financial actors, and interoperable AI native economic systems.

The standard already has strong backing. More than 70 projects, including infrastructure leaders, signalled support ahead of the launch. Whales also accumulated roughly US$375M in ETH in the week prior, suggesting strategic positioning for future network growth.

Elsewhere, the ecosystem continued gaining ground in tokenisation. Ethereum maintains a 65% share of all tokenised assets, with US$28B in active on-chain loans. This dominance is increasingly institutional in nature, supported by predictable settlement, mature tooling, and regulatory aligned infrastructure.

While near term flows remain negative, Ethereum’s structural and developmental trajectory remains strong as innovation continues to compound.

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Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

The Block: Spot bitcoin, ether ETF outflows accelerate, totaling nearly $1 billion

"Wednesday's outflows look like classic derisking behaviour - When macro conditions turn hostile, higher rates, geopolitical flare ups, or sudden volatility, institutions tend to rotate out of higher beta assets first," said Rachael Lucas, crypto analyst at BTC Markets.

"These aren't signs of structural weakness. Instead, they reflect institutions tightening risk ahead of uncertainty, not abandoning the asset class."

Announcements

Policy Week 2026

We’re pleased to be supporting Policy Week 2026, an event bringing together leaders from government, regulation, finance and technology to advance conversations shaping Australia’s digital-assets policy and market landscape. As a Cornerstone Sponsor, BTC Markets looks forward to engaging with the community in Sydney from 9-13 March and contributing to a week of thoughtful dialogue and connection.

Learn more

Giving back to the community

The BTC Markets team recently took part in our first community service event at the FareShare Kitchen Garden in Abbotsford. The team helped harvest fresh produce that supports community meal programs for people in need. We are proud to support initiatives that create a positive community impact and look forward to future opportunities to give back.

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Crypto in super: SMSFs power institutional-style growth

Self-managed super funds (SMSFs) continue to be one of the most strategic and fast-growing investor groups in Australia’s digital asset landscape. Findings from the BTC Markets Investor Study Report (ISR) 2025 show that SMSF trustees are embedding crypto into long-term retirement planning, with strong growth across registrations, portfolio values, and trading activity.

Read the Investor Study Report

The week ahead: Economic events

Thursday, January 29th

United States Fed Funds Interest Rate
Japan Consumer Confidence

Friday, January 30th

France GDP Growth Rate, GDP Annual Growth Rate
Spain GDP Growth Rate, GDP Annual Growth Rate
Germany GDP Growth Rate, GDP Annual Growth Rate, Inflation Rate
Italy GDP Growth Rate, GDP Annual Growth Rate
Euro Area GDP Growth Rate, GDP Annual Growth Rate
United States Producer Price Inflation MoM

Saturday, January 31st

China NBS Manufacturing PMI

Sunday, February 1st

India Union Budget 2026

Monday, February 2nd

China RatingDog Manufacturing PMI
United States ISM Manufacturing PMI

Tuesday, February 3rd

Australia Interest Rate
France Inflation Rate
United States Job Openings

Wednesday, February 4th

Euro Area Inflation Rate
Italy Inflation Rate
United States ISM Services PMI

Source: Trading Economics

Market reflections

United States: Consumer confidence slumped to its lowest since 2014
Europe: Economists kept euro-zone outlook steady as ECB policy was unchanged
China: Authorities pledged steps to boost consumption and services demand
Japan: Core inflation slowed in December but stayed above the BoJ’s 2% target
Australia: Unemployment unexpectedly fell to a seven-month low, bolstering rate-hike bets

Economic data this week highlighted diverging pressures across major economies. In the United States, consumer confidence dropped sharply to its weakest level since 2014, pointing to growing household unease around prices, labour market conditions, and the broader economic outlook.

In Europe, economists largely held their forecasts steady despite recent geopolitical uncertainty, reinforcing expectations that the European Central Bank is likely to keep policy unchanged in the near term.

China signalled a renewed focus on supporting domestic consumption and services demand, underscoring policymakers’ efforts to stabilise growth amid soft demand conditions.

In Japan, core consumer inflation eased in December but remained above the Bank of Japan’s (BoJ) 2% target. The data kept attention on the BoJ’s next steps as markets assess whether price pressures are becoming durable enough to justify further policy adjustment.

In Australia, the unemployment rate unexpectedly fell to a seven-month low, supported by strong employment gains. The result lifted expectations that the Reserve Bank may need to maintain a firmer policy stance for longer.

Taken together, market attention shifted toward how central banks interpret mixed signals rather than the data itself.

Final thoughts

Crypto markets remain tense but orderly. Liquidity has thinned, ETF outflows continue to pressure sentiment, and mining disruptions have introduced fresh volatility. Yet institutional buyers and long-term allocators continue accumulating into weakness, suggesting structural conviction is intact beneath the surface. Over the coming week, attention will centre on ETF flows, stablecoin issuance trends, and Bitcoin’s ability to defend the US$84,000 level. With macro conditions still cautious, patience remains key.

Ready to take advantage of the opportunities shaping the market? Log in to trade on Australia’s own digital asset exchange and stay positioned for what comes next.

Online safety: How to avoid unexpected money offers

Australians continue to receive messages claiming they are entitled to refunds, grants, prize winnings, or even inheritances. These offers may look official and often impersonate government agencies, banks, or well-known companies to appear trustworthy.

You may be asked to pay “processing fees” or “taxes” upfront, or to share banking or identity information to release the funds. These tactics are designed to create urgency or excitement, so you act before confirming whether the offer is genuine.

What to watch out for

Messages stating you are owed money, compensation, or an inheritance.
Requests to pay fees or taxes upfront to unlock funds.
Emails, letters, or texts that look official but ask for identity or banking details.
Social media messages about prizes that may not have come from the person they appear to be sent by.

How to stay safe

Pause and verify before responding. Genuine refunds or prizes do not require upfront payment.
Avoid paying any fees to access winnings or inheritance.
Do not share your bank account, crypto wallet, or ID details with unverified contacts.
Confirm claims through official websites or direct contact channels, not through links in a message.

Learn more at scamwatch.gov.au.

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