Key takeaways
- After remaining neutral through the holidays, Bitcoin had a small rally over the weekend surging past $94,000 in Monday trading.
- Liquidity continues to concentrate in Bitcoin as altcoin exposure remains a headwind for crypto investors,
- BTC is holding near cycle highs, and ETH is still defending mid-range levels.
Market overview
As we get going in 2026, the broader crypto market is stuck in a cautious holding pattern. Despite all that has happened this week, we conclude that risk isn’t being aggressively priced in, but it’s not being ignored either.
It is possible that geo-political pressure and macro uncertainty are pulling in opposite directions, keeping positioning light and conviction low.
Case in point is the recent U.S. military activity tied to Venezuela, which injected a short-term risk-off impulse. Traditional hedges reacted as expected: oil and gold caught bids. Crypto, however, did not move as a single block, as a single block; in fact, Bitcoin is slightly up this week.
Consequently, price action has been mixed, with stability in larger assets and hesitation elsewhere. No panic, but no enthusiasm.
On the policy side, the latest FOMC minutes reinforced the Fed’s preference to stay restrictive for longer. Any lingering optimism around early 2026 rate cuts has faded. Inflation remains sticky near 2.7%, leaving policymakers little room to pivot without clear signs of labor-market weakness.
That puts this Friday’s Jobs Report squarely in focus. Markets are watching for signs of real stress, not just marginal softening.
To summarize the market this week:
- Risk Sentiment: Neutral. The market is waiting for something concrete to react to.
- Crypto Impact: Capital is rotating internally rather than exiting. Bitcoin continues to absorb flows as the default defensive position, while altcoins trade on a case-by-case basis. Broad risk appetite remains limited.
Bitcoin (BTC) analysis
As of today, Bitcoin has clawed its way above $94,000. If the bulls can maintain this momentum, they can retest the $98,000 resistance level this week.
All this despite the volatility from the Venezuela news this week, BTC has found a floor and has built enough volume to punch through immediate highs.
The daily chart shows price compressing between the 20-day EMA and major resistance.
BTC/USD
Key levels
Here are the key levels this week:
- Major Support: $90,000 - $92,000. (This is the "line in the sand." A loss here opens the door to $85k).
- Major Resistance: $95,000 - $96,000. (The "supply wall" preventing a run to $100k).
Technical indicators
- RSI: Reset to ~55(Neutral). The overbought conditions have cooled off
- MACD: Flattening/Neutral. Momentum is pausing.
- Directional Bias: Neutral-Bullish. As long as $88k holds, this is likely a healthy pause before the next leg up.
Tabtrader pro tip: Watch for a "fake-out" wick below $90k early in the week to trap shorts before a recovery.
Ethereum (ETH) snapshot
As of 5th January, 2026, Ethereum continues to lag. Ethereum remains on the back foot relative to Bitcoin. This is because while BTC is holding near cycle highs, ETH is still defending mid-range levels in the first week of 2026. The ETH/BTC pair reflects that imbalance, with capital favoring perceived safety over beta.
- Relative Strength: Weak. No clear catalyst is driving rotation into ETH this week.
- Key Support Zone: $2,800–$3,000 This area needs to hold to prevent further relative deterioration.
ETH/USD
Major Altcoin sector overview
Layer 1 (SOL, ADA, AVAX)
This week, performance across Layer 1s is uneven. First, Solana continues to hold up better than its peers, with price stability around the $135 area. Second, ADA is trying to base near $0.33, but the structure remains heavy and unconvincing for now. Finally, AVAX is still lagging, with little evidence of sustained demand.
AI and data (FET, GRT)
This remains the strongest pocket of the market in contrast to other coins. Flows into AI-related tokens have been steady despite broader indecision, and the narrative still carries weight heading into 2026. Accordingly, momentum trades here continue to make sense as long as the sector holds relative strength.
Meme Coins (DOGE, SHIB)
In the meme coin scene volatility dominates.This is because price action is largely liquidity-driven, with capital rotating quickly from one meme to the next. These liquidity-driven moves tend to be short-lived and disconnected from any broader market structure. Consequently, risk is elevated, and timing matters more than conviction.
DeFi (UNI, AAVE)
Defi activity remains muted this week. Total value locked has gone sideways, and without a stronger ETH bid, this sector lacks a clear driver. For now, DeFi is more of a watchlist item than an active trade.
Sector takeaway
Given what’s been going on in the last seven days, momentum traders are better served focusing on AI names and selectively on SOL for relative strength. Additionally, legacy Layer 1s that continue to print lower lows offer little beyond opportunity cost.
Market metrics and sentiment indicators
Fear & Greed Index
Sentiment has recovered from last week but the index is still reading around 26. The small shift matters, but the level itself is unremarkable. This is the part of the well-known cycle where markets tend to go quiet, price chops, and positioning slowly rebuilds. It feels dull for a reason.
BTC Dominance
BTC dominance is hovering around 59%.
It is elevated because liquidity continues to concentrate in Bitcoin. In the new year week, that dynamic has not changed. Broad altcoin exposure remains a headwind for crypto investors, particularly on BTC pairs. As a consequence, until dominance rolls over decisively, sustained alt performance is likely to be isolated rather than systemic.
Key events to watch this week
- Friday, Jan 9 – U.S. Non-Farm Payrolls and Unemployment Rate. This is the week's main macro event and the main crypto market mover. A clear deterioration in labor data would shift rate expectations forward and likely support risk assets, including crypto. Firm employment numbers reinforce the current policy stance and limit upside. Either way, this report will set the tone for the weekend.
- Ongoing – Geopolitical Developments (Venezuela, Russia). Headlines remain a source of short-term volatility. Escalation tends to trigger fast, emotional selling rather than sustained trend changes. These moves are usually brief and often retraced once liquidity returns.
- Fed Speaker Commentary. Despite nothing being scheduled officially, markets will be listening for any refinement of the “pause” message implied in the recent minutes. Clarification matters more than tone. Off-script remarks can still move rates and, by extension, crypto.
Possible scenarios
Bearish Case
The market could turn bearish if a strong NFP print reinforces the current rate outlook while geopolitical tensions intensify. This combination pressures risk assets across the board.
If this is the case, Bitcoin will confirm a loss of near-term structure if it fails to hold $88,000 on a daily close. A fast move toward the CME gap near $85,000 becomes likely as stops are triggered and liquidity thins.
Neutral Case
This is the most likely case as economic data will probably come in close to expectations and headlines remain manageable.
Bitcoin will continue to trade sideways, rotating between $90,000 and $94,000 without follow-through in either direction.
Treat this as a range environment. Engage at the edges, not the middle. Avoid chasing momentum candles that lack volume support.
Bullish Case
This case is also likely and will happen if labor data shows clear cooling or geopolitical pressure eases, allowing rate expectations to shift modestly.
In a bullish market scenario this week, Bitcoin will regain $96,000 with expanding volume, signaling acceptance above resistance.
If we get a rally and a move back toward the $100,000. The previously-lost psychological level comes into play, with follow-through dependent on spot demand rather than leverage.
Bottom line
Our takeaway is that this week is about patience and positioning. Exercise patience because market direction is likely decided by Friday’s data, not Monday’s price action.
Over-leveraging early in the week offers poor odds and invites losses. To keep safe, take the following advice.
- Risk Management: If long, keep stops below $88,000.
- Positioning: If cash-heavy, look for bids in the $88,000–$90,000 zone rather than chasing strength.
- Focus Order: Bitcoin first, AI-related alts second, ETH after that. Everything else remains optional.
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