On-chain Evening Recap: Market Weakening, Bears Taking Profit, Longs Liquidating

Cryptocurrency markets have lost recent momentum, with top digital assets posting declines amid geopolitical tensions and anticipation of key U.S. jobs data. Bitcoin and Ethereum have both fallen in the past 24 hours, with Bitcoin down 2.4% to trade at $89,980.43 and Ethereum down 3.5% to $3,110.30 according to recent data. The broader market capitalization of cryptocurrencies has dropped to $3.08 trillion, reflecting a 2.5% overnight decline.

Bitcoin Spot ETFs in the U.S. experienced net outflows of $486 million on Wednesday, a reversal from earlier inflows. Ethereum ETFs also saw outflows, with Grayscale Ethereum Trust (ETHE) recording $52 million in outflows. Smaller altcoin ETFs, including those for Solana, have maintained more stable inflows.

Market observers are closely watching the upcoming U.S. jobs report due on Friday, with expectations for 60,000 non-farm payrolls. This data could influence sentiment and volatility in both traditional and crypto markets.

Why Did This Happen?

The decline in crypto prices coincided with increased geopolitical uncertainty. The ISM Services PMI for the U.S. rose to 54.4 in December, surpassing forecasts. This data may have reinforced investor caution as they await more definitive signals on economic health.

ETF outflows also contributed to the downward pressure on prices. Bitcoin ETFs experienced a sharp reversal after early inflows in the new year. These outflows suggest a shift in investor positioning, with some capital retreating from digital assets.

How Did Markets Respond?

Bitcoin and Ethereum have both fallen below previous peaks, with Bitcoin trading 29% below its October 2025 high. Several top-100 cryptocurrencies have also posted losses of more than 1%.

XRP, BNB, and Solana have all declined significantly, with XRP falling 7.6% to $2.08. However, some assets, including TRON and Zcash, have seen mixed results.

Whale activity has also been notable, with one whale increasing a Bitcoin long position. These large moves often signal strategic shifts.

What Are Analysts Watching Next?

Investors are awaiting the U.S. jobs report, with potential implications for broader market sentiment.

Regulatory developments also remain in focus, particularly for privacy coins like Zcash. Grayscale has filed for a privacy coin ETF, with a decision expected in early 2026.

Market structure bills in the U.S. Senate Banking Committee are also under consideration. A key vote is scheduled for the coming week, which could shape the regulatory environment for crypto products and ETFs.

Investors are also monitoring the performance of altcoins and smaller ETFs, which have shown more stability compared to Bitcoin and Ethereum. This suggests a potential shift in capital toward high-conviction or diversified positions.