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Why institutional money isn’t saving crypto from this sell-off

Why institutional money isn’t saving crypto from this sell-off

While traditional equity markets celebrated a historic relief rally, the cryptocurrency market posted a 1.42 per cent decline, settling at US$2.41T. This divergence tells a compelling story about the maturing yet still volatile nature of digital assets. As Wall Street surged on news of a temporary peace deal between the US and Iran and promises to reopen the Strait of Hormuz, crypto investors chose to lock in profits and unwind leveraged positions rather than join the broader risk-on celebration.

The contrast between these markets could not be starker. The Dow Jones Industrial Average logged its best day since April 2025, jumping 2.85 per cent to 47,910.79. The S&P 500 climbed 2.51 per cent to 6,782.83, and the Nasdaq surged 2.80 per cent to 22,635.00. Crypto showed a 69 per cent correlation with the S&P 500 and an even stronger 77 per cent correlation with Gold, which climbed to US$4,800 per ounce. Digital assets underperformed significantly despite these correlations. Internal market dynamics within the crypto ecosystem overpowered the positive macroeconomic backdrop that sent traditional markets soaring.

The primary culprit behind crypto weakness was a broad-based altcoin sell-off accompanied by aggressive unwinding of leverage. The Altcoin Season Index plummeted 12.82 per cent over the past week, signalling a clear rotation of capital away from higher-beta, riskier assets. Sectors such as the Binance Ecosystem and tokens under SEC or CFTC scrutiny fell approximately 1.6 per cent to 1.75 per cent, underperforming the broader market. This was not a panic-driven exodus triggered by negative news, but rather a calculated reduction in speculative exposure after recent gains.

Derivatives data reveals the mechanics of this de-risking. Bitcoin saw US$74.66M in liquidations over the past 24 hours, with short liquidations dominating. This indicates that leveraged positions were forcibly closed as traders scrambled to reduce exposure. Such forced liquidations often create cascading effects, amplifying downward pressure as margin calls trigger additional selling. The market essentially experienced a healthy flush of excess leverage, removing the frothy speculative positions that had built up during the recent rally.

Institutional demand, while still present, showed signs of cooling just when the market needed fresh capital inflows to counteract the profit-taking wave. Morgan Stanley’s spot Bitcoin ETF launch drew US$34M in day-one inflows, a respectable start but insufficient to offset the broader outflow pressure. The Fear and Greed Index sat at a neutral 43, representing a significant cooling from fear levels recorded last month. This neutral sentiment reflects a lack of the strong bullish conviction needed to push prices higher amid widespread profit-taking.

The timing of this crypto correction amid traditional market euphoria reveals an important maturation in the way digital assets respond to macroeconomic events. While equities rallied on the geopolitical breakthrough that sent crude oil prices plunging 16 per cent to US$94.41 a barrel, crypto investors appeared more focused on technical levels and internal market structure. The US Dollar Index, retreating 1.17 per cent to 98.6 points, and the 10-year Treasury yield, holding steady at 4.30 per cent, created a generally favourable macro backdrop, yet crypto remained constrained by its own internal dynamics.

Traditional market sector performance highlighted the dramatic shift in sentiment. Commercial airlines enjoyed robust gains as fuel cost concerns receded. Delta advanced 3.8 per cent, United climbed 7.9 per cent, and Carnival surged 11.2 per cent. The Energy sector was the sole laggard, down 3.7 per cent due to a plunge in crude oil prices. Asian markets showed mixed reactions. Japan Nikkei 225 rose to 56,395 points on April 9, gaining 0.15 per cent. The index has rebounded roughly four per cent month-to-date after a brutal March selloff caused by energy supply fears. Hong Kong Hang Seng volatility remains high, with recent data showing the index struggling to hold gains above the 25,000 level.

Commodities reflected the dramatic geopolitical shift. Benchmark US oil WTI plummeted 16 per cent to approximately US$94.41 per barrel, a drop reminiscent of the depths of the pandemic. Spot gold climbed to roughly US$4,800 per ounce while silver prices fell slightly on April 9 to US$73.49, down 0.85 per cent from the previous day. Currency markets saw the US Dollar Index retreat to 98.6, down 1.17 per cent, as geopolitical risk premiums unwound. Fixed income markets remained relatively stable with the US 10-year Treasury yield holding steady at 4.30 per cent on April 9.

Looking ahead, the market’s near-term health hinges on Bitcoin stabilising above the critical US$2.39T support level, which represents the 50 per cent Fibonacci retracement. A sustained break below this threshold could trigger a swift move toward US$2.34T at the 78.6 per cent Fibonacci level, particularly if ETF flows remain subdued. Conversely, a rebound above US$2.45T, the 38.2 per cent Fibonacci level, would signal that bullish control has been regained.

All my retail investor friends are eyeing April 16, when the SEC holds its roundtable on the CLARITY Act. They are hopeful that this regulatory development could provide the catalyst needed to shift sentiment and override the current technical weakness. The market finds itself in a corrective consolidation phase, where the flush of excess leverage and rotation out of altcoins represents a healthy reset rather than a fundamental breakdown.

For me, I think it’s “priced-in” already.

 
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Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Crypto rallies 4.5 per cent amid stock sell-off: Smart money is moving fast

Crypto rallies 4.5 per cent amid stock sell-off: Smart money is moving fast

Markets on January 13 and 14, 2026, signal a divergence between traditional finance and digital assets. In the United States, equities retreated as investors weighed mixed signals from inflation data and the opening salvos of earnings season. The Dow Jones Industrial Average dropped nearly 400 points, while the S&P 500 and Nasdaq Composite posted smaller but still notable declines. Financial stocks led the decline after JPMorgan Chase missed expectations on investment banking fees, underscoring how even modest disappointments can ripple through a market already cautious about the sustainability of growth.

Meanwhile, across the Pacific, Asian markets painted a more optimistic picture. Japan’s Nikkei 225 surged 0.9 per cent to breach the 54,000 mark for the first time in history, propelled by a weakening yen that slid past 159 per dollar and speculation around a potential snap election. Elsewhere in Asia, gains were modest but consistent, reflecting regional confidence that contrasts with Wall Street’s hesitation.

Commodities and currencies mirrored this tension between caution and opportunity. Gold pulled back slightly from its record high of US$4,644 an ounce to settle at US$4,590, suggesting that while safe-haven demand remains elevated, some investors are rotating into riskier assets. Crude oil rose 2.5 per cent to US$61 per barrel amid geopolitical tensions over potential US tariffs targeting nations trading with Iran. This shows that energy markets remain sensitive to policy-driven uncertainty. Currency markets showed similar stress, with the yen continuing its slide while the euro held steady near US$1.1645.

From my perspective, what stands out is not only the divergence between US and Asian equity performance but also the concurrent surge in crypto markets. Bitcoin reclaimed US$95,000, triggering a cascade of algorithmic buying and liquidating US$62 million in short positions within 24 hours. This move was not speculative noise. It was structurally reinforced by institutional momentum. Morgan Stanley’s filing for Bitcoin, Ethereum, and Solana ETFs marks a pivotal expansion of regulated crypto access, following Grayscale’s own exploratory filings and bolstered by pro-crypto political rhetoric. The numbers speak clearly: US$571 million flowed into Bitcoin ETFs this week, while Ethereum attracted US$1.24 billion. These are not marginal bets. They represent deep conviction from traditional finance players.

The technical breakout in Bitcoin coincided with a sharp spike in funding rates, up 87 per cent in one day, as leveraged traders scrambled to cover shorts after the price pierced the US$94,500 Fibonacci resistance. Open interest fell by nearly 10 per cent, indicating a wave of deleveraging rather than a new speculative buildup. That distinction matters. It suggests the rally has a foundation beyond hype. It reflects both institutional validation and a clearing of excessive bearish positioning.

Caution remains warranted. While cooler-than-expected US CPI data offered relief, bond markets still price in no Federal Reserve rate cuts until mid-2026. China’s consumer prices rose 0.8 per cent year-over-year, the fastest since early 2023, even as producer prices stayed deflationary, hinting at fragile domestic demand. These macro crosscurrents mean that while crypto enjoys a moment of strength, it does so against a backdrop where traditional markets are still searching for clarity.

In conclusion, January 14 presents a world in which legacy markets tread carefully amid earnings scrutiny and geopolitical friction, while digital assets surge amid institutional adoption and technical triggers. The real test will come in whether Bitcoin can hold above US$94,000 without immediate profit-taking. If it does, this rally may signal more than a short-term bounce. It could mark the beginning of a new phase in which crypto operates not as a fringe asset but as a core component of diversified portfolios.

 

Source: https://e27.co/crypto-rallies-4-5-per-cent-amid-stock-sell-off-smart-money-is-moving-fast-20260114/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Crypto crashes 3.7 per cent despite US shutdown deal: US$260M liquidations and whale exodus trigger sell-off

Crypto crashes 3.7 per cent despite US shutdown deal: US$260M liquidations and whale exodus trigger sell-off

The past 24 hours have exposed the fragility beneath recent crypto market gains, delivering a sobering reminder that sentiment can shift abruptly even amid macroeconomic progress. At first glance, the backdrop appears favourable. The US Senate passed a government funding bill on Monday evening, November 10, that would extend operations through January, marking a decisive step toward ending what has become the longest government shutdown in American history.

With a 60 to 40 vote, the chamber cleared the path for the measure to advance to the Republican-controlled House, where Speaker Mike Johnson signalled readiness to pass it swiftly and forward it to President Donald Trump for signature. This legislative breakthrough should, in theory, stabilise risk sentiment and restore confidence in the continuity of US fiscal governance.

The market’s reaction has been conspicuously muted, even negative. While US equities closed mixed on Tuesday, with the Dow surging 1.18 per cent, the S&P 500 edging up just 0.21 per cent, and the Nasdaq slipping 0.25 per cent, the crypto market tumbled by 3.67 per cent over the same 24-hour window. This divergence underscores a growing decoupling between legacy risk assets and digital ones, at least in the short term.

The Nasdaq 100, a traditional proxy for tech-driven risk appetite, now shows a sharply negative 24-hour correlation with crypto at negative 0.77. This marks the most pronounced short-term divergence in months, suggesting that crypto traders are acting on distinct catalysts absent in broader equity markets.

Three interlocking forces drove this sell-off: a cascade of leveraged liquidations, coordinated whale exits in Ethereum, and macro-level caution despite apparent political resolution. The first, and perhaps most mechanically significant, was the unwinding of excessive leverage in futures markets. Over US$260 million in crypto positions were liquidated in just one day, with longs accounting for 84 per cent of Bitcoin and 90 per cent of Ethereum losses.

This follows a 10 per cent weekly increase in open interest, indicating that speculators had aggressively positioned for further upside. When prices dipped, even modestly, margin calls triggered a feedback loop of forced selling, amplifying the initial decline into a full-blown washout.

Compounding this technical pressure was a strategic retreat by institutional and whale participants in the Ethereum ecosystem. Data confirms that two large holders offloaded 178,080 ETH, valued at approximately US$528 million, in what appears to be a coordinated profit-taking manoeuvre. This move coincided with the worst weekly outflow period for Ethereum spot ETFs since their launch. US$796 million fled the nine US-listed funds over the prior week, with every single ETF posting net redemptions.

Such synchronised outflows suggest more than just retail sentiment fatigue. They reflect a loss of institutional conviction at current valuations. With Ethereum’s RSI hovering near 38, a level often deemed oversold, the asset lacks organic buying pressure to absorb such large-scale exits, leaving technical support at US$3,360 as the next critical threshold.

Meanwhile, the macroeconomic data released this week offers a mixed signal. On one hand, the ADP National Employment Report published on November 5 showed that private employers added 42,000 jobs in October, the first monthly gain since July. Annual pay growth held steady at 4.5 per cent, signalling persistent wage pressures. However, a separate weekly ADP metric covering the four weeks ending October 25 paints a bleaker picture.

Private-sector employers shed an average of 11,250 jobs per week during that window. This internal contradiction, monthly gains versus deteriorating weekly trends, fuels uncertainty about labour market resilience heading into year-end. With the Federal Reserve still data-dependent, such ambiguity keeps rate-cut expectations tentative, despite gold rising to US$4,118.58 per ounce on hopes of easing monetary policy.

The US Dollar Index edged down 0.13 per cent to 99.46, while Brent crude rose 1.72 per cent to US$65.16 per barrel, reflecting cautious optimism about global demand. Crypto failed to participate in this risk-on drift. Instead, it exhibited classic risk-off behaviour, not because of direct Fed commentary or CPI surprises, but due to internal market structure vulnerabilities, namely, too much leverage and too little institutional anchoring.

From a strategic standpoint, this correction may be healthy. The 2.99 per cent weekly gain preceding the drop had stretched technical indicators and elevated funding rates into unsustainable territory. The liquidation event serves as a necessary recalibration, clearing weak hands and resetting leverage ratios.

The simultaneous ETF outflows and whale selling in Ethereum suggest deeper concerns about the token’s near-term utility or valuation relative to Bitcoin. While Bitcoin continues to benefit from its digital gold narrative and ETF inflows, Ethereum faces scrutiny over scaling progress, staking yields, and its role in a potential Web4 stack that increasingly integrates AI and decentralised finance in novel ways.

Looking ahead, all eyes turn to two pivotal levels. Bitcoin’s psychological and technical floor sits at US$60,000, and Ethereum’s support rests at US$3,360. A break below either could trigger further algorithmic selling and sentiment deterioration.

Conversely, suppose the government funding bill passes the House and is signed into law, currently estimated at a 96 per cent probability by November 15. In that case, it may restore enough macro calm to reignite risk appetite. Crypto’s fate will ultimately depend less on political theatre and more on whether organic demand can replace speculative leverage and institutional outflows. Until then, volatility remains the only certainty.

 

Source: https://e27.co/crypto-crashes-3-7-per-cent-despite-us-shutdown-deal-us260m-liquidations-and-whale-exodus-trigger-sell-off-20251112/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j