The cryptocurrency market continues to decline sharply following the Fed's decision to cut interest rates (25 bps to 3.75%-4%), with profit-taking and large liquidations putting pressure on the market. The total market capitalization decreased by 3.97% to $3.63T (down from $3.78T yesterday), while trading volume increased by 25.24% to $202B thanks to stablecoins (which make up 97.66%). The Fear & Greed Index is at 35 (Extreme Fear), reflecting heightened fear after $1.12B in liquidations in 24 hours (mostly long positions). Bitcoin dominance slightly increased to 59.16%, indicating that $BTC still serves as a "safe haven" amidst the storm.
Top news:
• Fed & Liquidity: Cut by 25 bps as expected, but Powell warns that Trump's tariff will lead to higher inflation, resulting in immediate profit-taking. End of QT on 1/12 could be bullish long-term (historically ETH rallies strongly after cuts), but today’s hawkish tone causes a sell-off. The probability of a 50 bps cut next is only 2%.
• Capital flows & ETF: Spot ETF $SOL /$LTC /HBAR (US) achieved $65M in volume on the first day; Solana ETF inflows $117.4M YTD. Bitcoin miner solo wins odds 1/10M, but solo mining remains difficult in 2025. Norway reports a 30% increase in crypto declarations ($4B assets from 73K individuals).
• Other news:
• AUSTRAC fines CryptoLink $37K for weak AML; China sentences USDT $166M money laundering case (continuation).
• Trump Media partners with Crypto.com for prediction markets; Western Union launches stablecoin on Solana in 2026.
• CZ (Binance) ranked 13 on the Hurun Rich List 2025 with ¥190B (up 41% YoY). Meme: 71-year-old lost $1M in a romance scam; Ansem troll “sold all crypto.”
• X posts: Mexican billionaire Ricardo Salinas: “Bitcoin is still early, the ultimate hard asset.” German AfD: BTC is “fundamentally different” from altcoins.
Short-term outlook:
The market is “selling the news” after the Fed, with risks from the Trump-Xi tariff and high volatility (open interest down 30% from the peak last month). Important BTC support at $105K; if held, dovish liquidity could push a rebound to $116K. Altcoins like SOL have upside from ETFs, but watch $107K BTC. Quick update, the market is changing rapidly.
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