The cryptocurrency market experienced muted gains of less than 1% over the past 24 hours, with the total market capitalization rising 1.49% to $3.02 trillion. The primary narrative is a market caught in a cautious pause, heavily influenced by macroeconomic factors and awaiting clarity from the Federal Open Market Committee (FOMC).
Bitcoin (BTC) remains the focal point of this hesitation, struggling to break through the $90,000 psychological barrier. Despite a brief attempt to reclaim this level, significant sell-side liquidity near $89,500 has forced the flagship cryptocurrency into a sideways grind. It is currently trading around $89,000, up a modest 0.82% to 1.2% on the day. Technically, BTC faces resistance near $89,250 with support closer to $85,000, remaining in a medium-term downtrend.
This stagnation contrasts sharply with the performance of gold, which smashed through an all-time high of $5,280 per ounce, outperforming the S&P 500's total return by over 100% in comparable periods. This surge is attributed to safe-haven flows as investors hedge against macro risk tied to FOMC news and a weakening US Dollar. The USD index slipped almost 3% this week to 96.09 and is down more than 10% over the last 12 months.
While Bitcoin waits, the decentralized finance (DeFi) sector is showing notable strength. Hyperliquid (HYPE) led the charge with a massive 27.77% surge. Ethereum (ETH) gained 1.7%, trading near $3,000. However, capital rotation is evident, with institutional funds flowing toward AI and high-yield protocols, putting pressure on the GameFi and DePIN sectors.
The macro backdrop is defined by uncertainty. The FOMC held interest rates steady at 3.50%–3.75%, dashing expectations of an early cut. Furthermore, political risk is rising, with Polymarket bettors assigning a 76% probability to a US government shutdown by January 31. Legislative progress on the US Crypto Clarity Act has also slowed, keeping institutional investors cautious.
On-chain activity reveals a shift in trader behavior, with Solana-based platforms like Pump.fun briefly overtaking Hyperliquid in daily revenue, indicating a rotation from derivatives trading to memecoin speculation. The overall market sentiment has improved slightly, with the Crypto Fear & Greed Index climbing from 'Extreme Fear' into the 'Fear' zone. Bitcoin mining stocks, such as Applied Digital (up 14%) and IREN (up 9%), also saw positive movement.
Adding a long-term perspective, analysts from Bernstein highlighted tokenization as a potential "game changer" for the industry, citing its ability to compress costs and cycle times across credit and equities markets.
