The cryptocurrency market experienced a notable pullback and cooling of trading activity on Friday, January 16, 2026, with total market capitalization easing to around $3.23 trillion, a decline of roughly 1.8% on the day. Despite positive momentum earlier in the week, leading assets Bitcoin (BTC) and Ethereum (ETH) wavered, with trading volumes falling sharply.
According to data from CoinGlass, Bitcoin's 24-hour trading volume plummeted 27% to approximately $65 billion, while Ethereum's volume dropped 32% to around $54 billion. This trend extended to other major altcoins like Solana (SOL), XRP, and Dogecoin (DOGE). Bitcoin's price hovered near $95,300, maintaining a 4.6% weekly gain, and Ethereum traded around $3,250, up 5.9% over the same period. Bitcoin's market dominance held firm near 59%, indicating capital concentration in the largest asset.
Analysts pointed to several factors driving the cautious sentiment and volume decline. A primary catalyst was the dashed hopes for imminent crypto legislation. Coinbase withdrew its support for a key crypto market structure bill following weeks of lobbying, highlighting tensions with the Securities and Exchange Commission (SEC). Coinbase CEO Brian Armstrong expressed continued optimism for a bipartisan bill but acknowledged procedural delays. The Senate Banking Committee postponed efforts to mark up the legislation, specifically the CLARITY Act, which had previously fueled market optimism.
Meanwhile, the rally has been largely sustained by institutional activity. Spot Bitcoin exchange-traded funds (ETFs) have generated consistent inflows, pulling in $1.8 billion over a four-day stretch. Jasper De Maere, a desk strategist at crypto market maker Wintermute, noted that "participation remains narrow," with Wall Street and ETFs "doing the bulk of the heavy lifting" recently, while retail activity has stayed subdued.
Other macro factors added to the uncertainty. Analysts like Carlos Guzman of GSR cited geopolitical tensions and developments in former President Donald Trump's pressure campaign against the Federal Reserve. Fed Chair Jerome Powell warned of attempts to undermine the central bank's independence. Sentiment gauges reflected the hesitation, with the Fear and Greed Index in neutral territory and declining trading volume suggesting investors prefer liquidity. The market appears to be in a phase of choppy consolidation, with bitcoin's resilience limiting deeper losses but altcoin momentum fading for lack of a fresh catalyst.
