Market update
The world is in flames, trillions have been erased from stock markets, petrol prices are through the roof, and somehow Bitcoin is up almost 25% from the lows.
It’s a welcome change after a year in which everything seemed to be breaking all-time highs except for crypto. Bitcoin saw an unbroken week of daily gains and is up 8.3% this week to trade around US$74,312, while Ethereum raced ahead of the top ten, gaining 16.4% to trade around US$2,331.
Oil futures have been volatile amid conflicting reports around how definitive Iran’s closure of the Strait of Hormuz is. The US has bombed Kharg Island’s defences, a facility that accounts for 90% of Iran’s oil exports, and threatened to seize it in a game of tit for tat with unpredictable consequences. Until the oil supply situation is resolved, financial volatility seems set to continue.
In Australia, pundits have tipped that the Reserve Bank will increase interest rates. XRP, Solana, Cardano, and Dogecoin each gained between 11% and 13%. The Crypto Fear and Greed Index is at 28, which is still in fear territory, but finally heading in the right direction.
Global markets have had a tumultuous start to the week, with oil prices trading like a pump-and-dump memecoin. Oil prices gained almost 30% yesterday, trading at four-year highs, amid fears that the war in Iran will dramatically squeeze oil supplies through lower production and the closure of the Strait of Hormuz. Stock markets plunged, and NAB analysts warned Australian inflation could surge to 5% as a result. Bitcoin, however, held up well, leading some analysts to suggest the bottom is in.
But oil prices have subsequently reversed most of the surge and fallen back below US$90 a barrel. After G7 countries discussed releasing up to 400M barrels from their reserves to shore up supplies, it emerged that oil tankers are crossing the strait with transponders off and after President Trump told CBS, “the war could be over soon.” The Kobeissi Letter says this fits the Trump crisis playbook to a tee, although stopping a multi-country war is clearly a lot more difficult than walking back tariffs. We’re not out of the woods yet, with US jobs data suggesting the country lost 92,000 jobs in February, and oil prices remain much higher than a month ago.
Bitcoin attempted a breakout above A$104K (US$74K) mid last week, but it didn’t hold. After all the drama, Bitcoin finishes the week pretty much where it began – around A$97,820 (US$69.1K). ETH fell by 1% to trade around A$2,856 (US$2,019). XRP lost 1.4%, Solana (-1.4%), Dogecoin (-2.4%) and Cardano (-6.4%). Strategy bought another 17,994 Bitcoin for A$1.8B (US$1.28B), in the largest acquisition since January, and the Crypto Fear and Greed Index is at 13, or Extreme Fear.
Bitcoin has held up well amid the conflict in the Middle East. While it fell sharply as news broke that the US was bombing Iran, it recovered fast, too. Bitcoin surged 5.9% overnight and is now trading above its pre-conflict levels. Analysts suggest the overnight move may be short covering by options traders rather than a decisive move to the upside. With the conflict set to last weeks, and the Iranians closing the Strait of Hormuz – a vital trade route for around 20% of global oil – risks are piling up.
The weekend’s conflict has highlighted the advantages of “non-custodial, always-on trading infrastructure”, as media began reporting on commodity price moves on Hyperliquid with traditional markets closed.
Prior to the Iran situation, Bitcoin surged 11.5% over a little over a day last week, providing hope that prices could recover as quickly as they had fallen. “Bitcoin is capable of making very big moves, very fast,” analyst Scott Melker observed.
Bitcoin finishes the week up 6.1% to trade around A$96,928 (US$68,753) while Ethereum is up 8.5% to trade around A$2,852 (US$2,021) — but it has just marked six months in a row in the red. XRP gained 2.3%, Solana was up 10.5% and Cardano has overtaken Bitcoin Cash again by market cap, with a 4.1% gain. Both Strategy and BitMine added to their positions this week. The Crypto Fear and Greed Index is at 14, or Extreme Fear.
“It’s always darkest before the dawn”, they say, and if that’s true, dawn should be coming soon. We are only two months into 2026, and already Bitcoin is on track for its worst quarter since 2018. Since the October 10 flash crash, crypto has only seen 4 positive weeks out of 21 in total. Delphi Digital reports that only 4 of 98 altcoins it tracks have increased in value since last year, while the average coin has dropped 81.4%. The Crypto Fear and Greed Index has fallen to 8, and sentiment is so grim, people have taken to posting terrible news as indicators that things can’t possibly get worse.
So the fact that searches for “Bitcoin is going to zero” are at record highs, or that Bitcoin is closing in on five negative months in a row, are both being interpreted as a sign that things will turn around soon, as these indicators have preceded turnarounds in the past.
President Donald Trump’s erratic tariff war entered a new phase this week, after the Supreme Court disallowed the tariffs he’d imposed under emergency provisions. He immediately imposed 15% tariffs across the board under different powers that will expire in 150 days, so there is more uncertainty to come as the administration searches for other methods to impose them.
Tariff uncertainty and the threat of war with Iran were blamed for Bitcoin’s sharp 5% drop on Monday, although it could also just be the usual low-liquidity weekend shenanigans. It’s not just crypto in turmoil; delivery, payments, and software stocks are falling sharply overnight in the US, in response to AI disruption fears outlined in Citrini’s sci-fi-style AI doom scenario, looking back from 2028. “It is a remarkable reaction,” said Michael O’Rourke, chief market strategist at Jonestrading. “A literal work of fiction sends [the market] into a tailspin.”
Bitcoin mining difficulty surged 15%, suggesting the temporary hashrate decline was more due to winter storms in the US than to unprofitable miners leaving the industry. The Other Parker also put out a detailed theory suggesting the crash was caused by too many funds going long on Bitcoin, meaning that when a short (volatility) fund blew up in October, they were forced to sell to hedge in a downward spiral.
Bitcoin finishes the week down 5.7% to trade around A$91,901 (US$64,932), while Ethereum fell 6.8% to trade around A$2,640 (US$1,863). XRP, Solana & Cardano fell by more than 9% while Dogecoin dropped 8.4%.
It’s been another grim week for Bitcoin hodlers, with the fourth weekly negative close below the 100-week moving average. Spare a thought for ETH hodlers who are on track for their sixth consecutive month in the red and are 60% down from the all-time high. The only other time that happened was a seven-month negative stretch in 2018 — though that was followed by six of the next seven months of price appreciation. Some green shoots have appeared, with Bitcoin’s three-month futures basis and funding rates ticking up, suggesting more traders are going long. Coinbase says its retail users in the US are “buying the dip” and long-term ETH accumulation addresses have seen significant inflows. Bitcoin is down 2.7% from seven days ago to trade around A$97,495 (US$68,769), which is below last cycle’s all-time high, while Ethereum has lost 6.3% over the same period to trade around A$2,830 (US$1,996). XRP gained 2.3%, Dogecoin 4.7%, and Cardano 5.8%, while Solana fell 1.8%. The Crypto Fear and Greed Index is at 12, or Extreme Fear.
With the blame game over the October 10 flash crash still ongoing — OKX CEO and Cathie Wood blame Binance, but CZ denies it — crypto markets saw the tenth biggest single day liquidation event on the weekend with A$3.74B (US$2.6B) wiped out. Over four days, around A$7.2B (US$5B) of leveraged trades were flushed from the system.
Bitcoin has now experienced four consecutive down months, which would be perfectly in keeping with the end of the four-year cycle. “So far, history is repeating,” said RektCapital. But this was far from a crypto-only crash, with the extraordinary precious-metals bubble popping on Friday US time, wiping 31.4% from silver and 9% from gold. The shock losses spooked crypto investors and global markets.
The common explanation for the metals crash was President Trump’s nomination of Kevin Warsh to chair the Federal Reserve. He’s seen as hawkish, inflation-focused and unlikely to aggressively cut interest rates or to fire up the money printer (some think this narrative is overblown, however). The US government is partially shut down, but a last-minute deal will reportedly see it reopen this week.
Bitcoin fell as low as A$107.4K (US$74.6K), but at the time of writing, it was trading at A$112,803 (US$78,713), down 11.2% on the same time last week. Ethereum lost 19.5% to trade around A$3,364 (US$2,343), but Goldman Sachs has just released a report saying the fundamentals remain stronger than during DeFi Summer. Solana lost 16.2%, Dogecoin lost 12% and both XRP and Cardano lost 15.4%. The Crypto Fear and Greed Index is at 17, or Extreme Fear.
President Trump’s dramatic reality series moves so fast that last week’s crisis over Greenland seems a distant memory. Trump reversed his threatened tariffs on a variety of European countries after reaching a deal, but the resulting breakdown in trust is set to upend international relations in unpredictable ways. The market mayhem continued with Trump subsequently floating 100% tariffs on Canada over a free trade deal with China that Canada says doesn’t exist. Meanwhile, the controversial ICE shootings in Minneapolis have seen Democrats vow to oppose further ICE and DHS funding, which has increased the odds of a government shutdown at the end of the week to 76%. The last shutdown saw Bitcoin draw down by around 25%. The US dollar is losing steam, and the Federal Reserve and the Japanese government are both reportedly considering intervening to support the Japanese yen.
Bitcoin came within sight of the US$100K/A$149K mark on January 15, as excitement grew about the potential for the CLARITY Act to sail through markup. But negotiations have stalled for now, and the markup has been delayed.
President Donald Trump’s latest tariff threats against European countries opposed to handing Greenland over to the US follow his usual playbook of delayed implementation (10% in February and 25% in June) to allow time for negotiation. That may be why crypto didn’t react much initially, but lost thousands in an hour on Monday after the EU signalled it is preparing punitive retaliatory measures. Gold and silver, meanwhile, surged to new highs.
Adding to the uncertainty, the US Supreme Court is due to rule any day now on the legality of his tariffs, with Polymarket estimating just a 30% chance they will be declared legal. Bitcoin finishes the week up 1.5% on seven days ago to trade around A$138,109 (US$92,675), while ETH is up 3.1% to trade around A$4,757 (US$3,192). XRP fell 3.1%, Solana lost 3.8%, and Dogecoin dipped 5.5%. The Crypto Fear and Greed Index is at 32, or Fear.
Crypto has held up reasonably well, considering the ongoing unrest in Iran, a politically tinged investigation into the US Fed chair, and regime change in Latin America. Adding some extra spice to the coming week, the US Supreme Court is set to rule on President Donald Trump’s tariffs on January 17, with considerable uncertainty surrounding the ruling and its potential market reaction.
After a disappointing 2025, in which the Bitcoin price declined for the first time in a post-halving year, 2026 is already looking more promising. Bitcoin is up 7.5% from the same time last week, trading around A$139,529 (US$93,693), while Ethereum gained 9.5% to trade around A$4,781 ($3,210). Ripple surged by a whopping 26.5% while Solana (11.7%), Dogecoin (22.5% and Cardano (18.9%) all saw significant gains. Geopolitical strife typically weighs heavily on markets, but the US military operation in Venezuela has seen both crypto and traditional markets rise in its aftermath. One theory suggests that President Trump’s promises of increased oil production will result in lower energy prices. Crude oil has already fallen, which will, in turn, result in lower inflation and, consequently, boost asset prices. While the end of sanctions could lead to a bump in near-term oil production, analysts say that getting Venezuela back up to full production will likely take years and US$100 billion (A$149B) in infrastructure. Another bright spot for crypto was the fact that end-of-year crypto tax loss harvesting in the US (AKA wash trading that pushes down prices) stopped on December 31. Sentiment has risen, and after three weeks of extreme fear, the Crypto Fear and Greed Index is finally back to just 26 or Fear today. Santiment analyst Brian Quinlivan said its social media analysis showed sentiment is even better than that and is actually “very positive at the moment.”
The S&P 500 and the Dow Jones hit new all-time highs this week, but despite bullish crypto developments almost every day recently, Bitcoin fell 4.6% over the past seven days to trade around A$130,189 (US$86,471). Ethereum lost 5% to trade around A$4,473 (US$2,969), XRP lost 8.8%, Solana (-4%), Dogecoin (-8.8%) and Cardano (-10.3%). One catalyst for the negative sentiment was Bloomberg’s report that the Bank of Japan plans to raise rates at its December 19 meeting, with more rises expected in 2026. Previous BoJ rate hikes have seen Bitcoin fall around 20% — although given it’s already widely expected, the news may already be priced in.
The US Federal Reserve cut interest rates, but Jerome Powell suggested further cuts are unlikely for now. The Fed also announced A$60B/US$40 billion short-term treasury purchases from this month, sparking a debate as to whether it was “real” quantitative easing or not. US jobs and inflation data are scheduled for release this week and may spark volatility.
Unusual trading patterns in the recent week have led to speculation about manipulation, and there are unverified rumours about Wintermute dumping billions, as well as Hyperliquid market makers ABC and CyantArb and hedge fund Selini Capital sustaining heavy losses from the October 10 flash crash. Crypto trading volumes have fallen by two-thirds since the start of the year, but Bitfinex notes that this has historically preceded the next leg up. DeFi Llama reports that the correlation between the largest crypto assets has been unusually high over the past week, with many pairs having coefficients over 0.9. The Crypto Fear and Greed Index has been stuck at Extreme Fear since November and is currently at 16.