Mid-Month Market News

Key developments shaping digital asset markets and policy this month:

• CLARITY Act delayed, not derailed: Senate postponement reflects amendment friction rather than rejection, with bipartisan consensus on crypto market structure and regulatory clarity still intact.
• SOL tests conviction at support: A derivatives-led pullback pushed Solana (SOL) below key moving averages, placing the $128–$130 zone at the center of near-term directional risk despite solid on-chain fundamentals.
• Geopolitics drive crypto volatility: Bitcoin sold off after President Donald Trump’s tariff threats tied to Greenland negotiations, reinforcing crypto’s continued correlation with global risk assets during macro shocks.
• Accumulation accelerates beneath the surface: Mid to large sized Bitcoin holders are accumulating at the fastest pace since 2022, while retail participation is also rising despite range-bound prices.
• Institutional inflows set to grow: JPMorgan expects global digital asset inflows to surpass the $130 billion recorded in 2025, with corporate treasuries remaining a dominant source of capital and institutions positioned to re-engage as regulatory clarity improves.

CLARITY Act Delay Raises Near-Term Uncertainty for U.S. Crypto Policy

A postponed Senate markup clouds legislative timing, but Washington’s broader trajectory toward digital asset innovation remains intact.

The U.S. Senate’s decision to delay consideration of the Digital Assets Clarity (CLARITY) Act introduces short-term uncertainty around the timing of comprehensive crypto asset regulation. Despite the procedural setback, bipartisan alignment on the need for a coherent federal framework continues to support a constructive long-term outlook for U.S. digital asset markets.

• Senate delay, not derailment: The Senate Committee on Banking, Housing, and Urban Affairs postponed a planned markup in January after facing more than 100 proposed amendments, reflecting political and procedural friction rather than a rejection of the bill’s core objectives.
• House momentum already established: CLARITY passed the U.S. House of Representatives in July 2025 with bipartisan support, setting out a unified framework for market structure, consumer protection, and oversight responsibilities.
• Regulatory roles clarified: The Act formally delineates authority between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), addressing long-standing ambiguity that has constrained institutional participation.
• Industry support fractures over amendments: The most contentious proposal sought to amend the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act by restricting interest payments on stablecoins; in response, Brian Armstrong publicly withdrew support for CLARITY, signaling heightened industry opposition while the provision remains under consideration.
• Multiple legislative paths ahead: Lawmakers may resolve differences quickly, extend negotiations into mid-year, pursue narrower standalone bills, or risk deferral beyond the November 2026 mid-term elections, each carrying different implications for market confidence.

Solana Pullback Tests Key Technical Support

Liquidations and technical breakdown pressure SOL despite resilient on-chain fundamentals.

SOL reversed sharply from recent highs, falling nearly 4% over the past 24 hours and retreating from levels near $145. The move reflects a broader risk-off tone across altcoins, amplified by derivatives liquidations and a decisive break of key technical levels, even as network fundamentals remain intact.

• Derivatives-driven selloff: Nearly $390 million in crypto positions were liquidated during the move, with approximately $348 million coming from long positions, accelerating downside momentum as leverage unwound.
• Technical levels breached: SOL fell below both its 20-day and 50-day exponential moving averages, signaling a loss of short-term trend support and increasing near-term uncertainty.
• Volume confirms conviction: Trading activity surged during the decline, including an hourly spike of roughly 3 million SOL traded—more than double the 24-hour average—suggesting active repositioning rather than low-liquidity drift.
• Fundamentals remain strong: Despite price weakness, the Solana network continues to host close to $15 billion in circulating stablecoins and over $1 billion in tokenized real-world assets, underscoring sustained on-chain activity.
• Critical support zone in focus: SOL is now testing the $128–$130 range, a multi-week support area. A sustained break below this zone could open downside toward the low $120s, while a successful defense may stabilize price action.
• Outlook split among analysts: Some view the pullback as a shakeout that could reset positioning and allow for a rebound toward higher levels, while others warn that macro uncertainty, ETF outflows, and geopolitical risk could extend the correction.

Bitcoin Drops as Tariff Threats Trigger Global Risk-Off Move

Geopolitical tensions tied to Greenland negotiations pressure crypto, equities, and currencies, while gold attracts renewed safe-haven demand.

Bitcoin declined sharply over the weekend as escalating geopolitical tensions unsettled global markets, reinforcing the asset’s ongoing sensitivity to macroeconomic and policy-driven shocks. Rather than acting as a hedge during periods of stress, digital assets once again moved in tandem with traditional risk markets as investors reassessed exposure amid rising uncertainty.

• Tariff threat drives initial selloff: Bitcoin slid roughly 3% after President Donald Trump threatened sweeping tariffs on North Atlantic Treaty Organization (NATO) allies in connection with negotiations over Greenland, triggering a broad risk-off move across global markets.
• Clear escalation path outlined: The White House indicated that tariffs of 10% would take effect on February 1, rising to 25% by June, on goods from the United Kingdom, Denmark, Norway, Sweden, France, Germany, the Netherlands, and Finland if no agreement is reached, heightening fears of retaliation and slower global growth.
• Risk assets move in lockstep: As the president’s comments jolted equities, fiat currencies, and bonds, cryptocurrencies traded alongside broader markets rather than demonstrating store-of-value characteristics, underscoring Bitcoin’s exposure to geopolitical shocks.
• Safe-haven divergence emerges: While Bitcoin weakened, gold advanced approximately 1.7% to around $4,664 per ounce. At the same time, the U.S. dollar softened and U.S. stock futures moved lower, signaling a shift toward traditional defensive assets.
• Bearish sentiment gains traction: Market expectations have turned more cautious, with pricing implying a challenging quarter ahead for Bitcoin. Analysts point to the asset’s failure to reclaim key long-term levels as reinforcing downside risks, including the possibility of deeper mean reversion if macro pressures persist.
• Long-term conviction remains intact: Despite near-term volatility, some institutional and corporate allocators continue to express confidence in Bitcoin’s longer-term outlook. Ongoing accumulation by large holders and bullish multi-year price forecasts highlight the widening gap between short-term market stress and longer-term adoption narratives.

Bitcoin Accumulation Strengthens as Prices Consolidate

Mid and large sized holders are accumulating at the fastest pace since 2022, signaling growing conviction beneath subdued price action.

Despite muted price performance in recent weeks, on-chain data indicates a notable resurgence in Bitcoin accumulation across both institutional-sized and retail cohorts. The divergence between sideways price action and strengthening ownership trends suggests that multiple segments of the market are positioning for longer-term value rather than reacting to short-term volatility.

• Largest cohort accumulation since 2022: Entities holding between 10 and 1,000 Bitcoin, often described as mid to large-sized holders, have accumulated approximately 110,000 Bitcoin over the past 30 days, marking the strongest monthly inflow since the market dislocation following the FTX collapse in 2022.
• High-conviction buyers emerge: This cohort typically includes high-net-worth individuals, proprietary trading desks, and institutionally scaled participants, groups historically associated with longer investment horizons and opportunistic accumulation during periods of market consolidation.
• Range-bound pricing masks demand: Accumulation has accelerated while Bitcoin continues to trade within a narrow range, roughly 25% below its prior peak and approximately 15% above recent cycle lows, suggesting buyers are identifying value despite the absence of upward momentum.
• Growing concentration among larger holders: Holdings controlled by mid- and large-sized entities have risen to nearly 6.6 million Bitcoin, up from roughly 6.4 million just two months ago, reflecting sustained capital deployment at current levels.
• Retail participation also increases: Smaller holders owning less than 1 Bitcoin have added more than 13,000 Bitcoin in recent weeks, representing the strongest accumulation by this cohort since late 2023 and lifting total retail-held balances to approximately 1.4 million Bitcoin.
• Broad-based demand signals: Simultaneous accumulation by both sophisticated and retail participants suggests a shared perception of deep value, reinforcing the view that current price levels may be forming a durable base rather than signaling structural weakness.

JPMorgan Sees Digital Asset Inflows Exceeding 2025 Record

Global capital allocations to crypto assets are expected to expand further, even as flow composition continues to evolve.

JPMorgan expects global capital inflows into digital assets to exceed the record $130 billion accumulated in 2025, reinforcing the view that crypto assets are becoming an increasingly embedded component of global capital markets. The projection comes despite weaker price performance late last year, suggesting that capital formation has remained resilient beneath short-term volatility.

• Inflows strengthened through 2025: The bank estimates total digital asset inflows rose by roughly one-third compared with 2024, even as crypto markets retreated in the fourth quarter after nine consecutive months of gains.
• Broad-based flow measurement: JPMorgan’s analysis combines crypto fund flows, positioning implied by Chicago Mercantile Exchange (CME) futures, venture capital fundraising activity, and digital asset purchases by corporate treasuries to capture a comprehensive picture of market participation.
• Retail-linked demand drove growth: The surge in capital was largely supported by retail-facing channels, including strong inflows into bitcoin and ether Exchange-Traded Funds (ETFs), alongside continued accumulation by digital asset-focused corporate treasuries.
• Corporate balance sheets took the lead: More than half of total inflows, approximately $68 billion, originated from corporate treasuries. Strategy accounted for roughly $23 billion of that figure, while other public and private companies increased bitcoin purchases to about $45 billion from just $8 billion the prior year.
• Institutional participation softened: Momentum faded into the fourth quarter, with digital asset treasury purchases slowing after October. At the same time, positioning in CME bitcoin and ether futures weakened across 2025, indicating reduced activity from hedge funds and other professional investors.
• Venture capital remained constrained: Venture funding increased modestly in dollar terms but declined in deal count, with activity skewing toward later-stage rounds. JPMorgan notes that capital traditionally allocated to early-stage venture deals appears to have shifted toward liquid corporate treasury strategies, reflecting a preference for near-term flexibility and balance sheet optionality.