19.01.202615:32 Forex Analysis & Reviews: Crypto market: stress test amid macro storm

Long-term bullish potential for the crypto market remains intact, but its realization is being delayed. In the short term, crypto dynamics will be hostage to external factors: Fed policy, trade wars, and regulatory decisions.

At the start of the new week, markets came under heavy negative pressure amid rising geopolitical tensions and mounting tariff risks. The dollar and major US equity indices are showing corrective declines and look set to finish the week in the red. The main driver of the sell-off was new tariff risks triggered by statements from US President Donald Trump, together with rising tensions between the US and EU countries, as we noted in today's reviews "S&P500: current situation and US market outlook" and "Dollar: under crossfire (current situation and outlook)."

The dynamics of major crypto assets also point to widespread investor confusion.

Bitcoin's sharp 3% decline early in the week below 92,000.00 was an alarming signal for the entire crypto market. BTC/USD, which last week had barely approached the key resistance at 99,300.00 (daily EMA200), faced a powerful wave of selling that exposed digital assets' vulnerability to mounting macroeconomic and geopolitical risks. The Fear & Greed Index returned to the "fear" zone, indicating predominance of panic among investors.

Current situation: why is the crypto market under pressure?

Against a backdrop of rising geopolitical tension, higher precious?metal prices and global economic uncertainty, investors prefer to be cautious and are not increasing allocations to risky assets. The correction affected not only Bitcoin but also the altcoin market. Among the top?10 cryptocurrencies, Cardano (ADA) showed the steepest decline — down about 7.5% as of this morning, trading near 0.3670 at the start of the US session, with today's drop amounting to roughly 15%.

Bitcoin's fall and the decline of total market capitalization to $3.12 trillion are driven by a complex of fundamental factors prompting investors to exit risky assets en masse:

• Geopolitical storm: threat of a transatlantic trade war. President Trump's statements about introducing 10% tariffs on goods from key European countries starting February 1, and the EU's retaliatory measures of €93 billion, have created unprecedented tension. Investors fear a sharp slowdown in global trade and growth. In such conditions, capital flows into traditional "safe havens," including gold, which today hit a record near $4,690.00 an ounce, directly competing with Bitcoin for safe?haven status.
• Regulatory uncertainty in the US: A further blow came from the delay in voting on the crucial CLARITY Act on crypto?market structure and transparency in the U.S. Senate. Criticism from major market players, including Coinbase, centers on concerns that the bill in its current form could effectively limit the development of tokenized securities. There is also discussion of tighter controls on money?transmission companies, increasing fears about more stringent regulation and limiting new capital inflows to the sector.
• Tight Fed policy: market pricing in CME FedWatch implies that the first Fed rate cut may not occur before June 2026. That means high real rates and no influx of cheap liquidity — the key fuel for risk?asset bull runs, including crypto.

Technical analysis and key levels

Last week's failed attempt to reach 98,100.00 (daily EMA144) was driven not by sustainable spot accumulation but by speculative moves in the derivatives market, analysts note. This indicates the weakness of the current upward impulse.

Nearest support lies in the 92,500.00 (daily EMA50) – 91,900.00 (4?hour EMA200) zone. A break below this area could open the way to a deeper correction.

Resistance: to resume the rally, Bitcoin needs to hold above 94,100.00 (1?hour EMA200) – 95,500.00, then overcome the key resistance zone at 98,100.00 – 99,300.00 (daily EMA200). The main psychological barrier remains 100,000.00.

The overall picture remains fragile and requires confirmation of buying momentum.

Outlook

What to expect for the crypto market in the coming days/weeks? The week of January 19–25 will be a decisive stress test due to a packed news schedule:

• Political risks (Tue–Wed): Donald Trump's remarks at the World Economic Forum in Davos could either worsen or ease trade tensions. Any hawkish rhetoric will weigh on BTC.
• Macro releases (Thu–Fri): key US data on GDP, initial jobless claims and PMI will affect rate?cut expectations for the Fed. Strong prints could push back easing expectations, which would be negative for risk assets.
• Domestic factors: progress on the CLARITY bill or new regulatory announcements could trigger sharp sector moves.

Possible scenarios

• Negative (continued correction) — triggered by escalation of the trade conflict, persistent hawkish Fed rhetoric and absence of regulatory progress. Targets could include testing lower support levels near 80,600.00–77,500.00 (weekly EMA144).
• Sideways (consolidation) — the most likely near?term scenario. BTC may trade in a wide range of 90,000.00–98,000.00 while awaiting clearer macro signals.
• Positive (recovery) — possible if US–EU rhetoric de?escalates, the Fed signals earlier easing than expected, or regulatory breakthroughs occur. This could fuel a new attempt to test 99,300.00 and then 100,000.00.

Conclusion

The crypto market — and Bitcoin in particular — has run into hard reality: amid macro turbulence and geopolitical shocks digital assets have not yet demonstrated convincing safe?haven properties, ceding ground to gold. The current correction reflects overall market risk sentiment.

Long?term upside potential remains, but its realization is delayed. In the short term, crypto dynamics will be dictated by external factors: Fed policy, trade wars and regulatory decisions. Investors should prepare for elevated volatility and exercise caution until clear signals of macro stabilization appear.