Crypto Market

BTC and ETH Market Insight

Last week reflected a classic year-end fade during the Christmas period. Overall market capitalization hovered around $3 trillion early in the week but dipped below it before a slight recovery to $2.95–$2.97 trillion. The Santa Claus rally didn’t materialize in crypto but instead shifted liquidity toward commodities, where gold (XAU) climbed nearly 5%, hitting a high of $4,549.8 before easing mildly to $4,530 by week’s end. Silver (XAG) followed a similar bullish pattern, posting an even larger gain of close to 18%, rising from $67 to $79 after breaking and retesting several key resistances in an uptrend rally.

The precious metals surge highlighted that liquidity was flowing away from both crypto and stock markets and into commodities, driven by concerns over a weakening dollar and growing preference for safe-haven assets in an increasingly risky environment. Many participants appeared to be rotating capital into gold and silver as traditional stores of value amid broader uncertainty. Sentiment cooled from neutral to fear, influenced by year-end tax-loss harvesting, thinned liquidity, and lower trading volumes—as reflected in the Fear and Greed Index—while DeFi total value locked (TVL) sits at $118 billion after nearly touching its all-time high in October, underscoring widespread caution amid ongoing macroeconomic pressures.

Bitcoin (BTC) continued bouncing within a consolidation range of $85,000–$87,000 after testing the $90,000 resistance and getting rejected again. The $87,000 level tried to hold as key support but ultimately failed, with price breaking lower to retest $85,000 mid-week. Ethereum (ETH) showed similar downward pressure, trading around $2,900–$3,000, while Solana (SOL) bucked the trend with modest gains, supported by continued ETF inflows amid broader altcoin underperformance.

Upcoming Macro Calendar - Source: Trading Economics

Options Market

The options markets for Bitcoin and Ethereum exhibited subdued activity amid holiday thinning liquidity and a $27B Deribit expiry cleared more than 50% open interest. Realised volatility grinded lower from 50 to 35 for BTC and 68 to 44 for ETH. One-week implied volatility for BTC drifted lower from 50% to 35% in tandem with realised volatility, reflecting low expectations for near-term swings. ETH IV followed suit, aligning with a similar low-vol environment. Put skew moderated a bit but continued to show persistent premiums, indicating cautious optimism. Transaction volumes modestly increased from pre-expiry repositioning, but perpetual OI dropped, indicating de-risking for thin holiday-trading sessions.

Altcoins and Blockchain News

Macro

The major benchmarks finished the week with solid gains in the holiday-shortened week: the DJIA rose +1.2%, the S&P 500 added +1.4%, and the Nasdaq advanced +1.2%. The Chinese stock market also finished a strong week: the Shanghai Composite Index rose +1.88% and the CSI 300 added +1.95%.