1. Editor's Note

[Personal View] The Geopolitical "Gray Swan" and the Institutional Great Rotation

The week of January 5th to 11th has been the most dramatic start to 2026 imaginable. Instead of the anticipated "January Effect" rally, the market has been held hostage by geopolitical upheaval in Venezuela and weak US payroll data. Bitcoin, after failing to breach $93,000 early in the week, is now entrenched in a war of attrition around the $90,000 level.The most critical signal this week is not price volatility, but the violent divergence in institutional flows. Bitcoin Spot ETFs saw rare net outflows this week (over -$681M), while simultaneously, ETFs for high-utility chains like Solana and XRP attracted inflows. This suggests institutions are no longer blindly buying "the market" (Beta) but are engaging in a sophisticated rotation, betting on specific payment and utility narratives.

Macro-wise, the US "Liberation Day" operation in Venezuela initially spiked risk-off sentiment, but subsequent fears over asset seizures have triggered deep "censorship resistance" anxiety within crypto. Compounded by Friday's weak NFP data (only +50k jobs), the market is rapidly switching from "Reflation Trade" to "Recession Defense". With CPI data looming next week, maintaining liquidity is the prudent play.

2. Market Overview

Cut-off Time: January 11, 2026, 23:59 UTC+8

• 
  Sentiment: The Crypto Fear & Greed Index fell to 27 (Fear), a significant retreat from last week, indicating a defensive market posture.Dominance: Bitcoin dominance stands at 58.5%. Altcoins are performing unevenly amidst the liquidity crunch.Liquidations: 24-hour total liquidations briefly topped $260M, mostly longs, highlighting strong passive buying support below $90k.

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3. Top Stories

1. US Strikes Venezuela, Sparking Asset Seizure Fears
   The US military operation in Venezuela and the capture of Maduro ("Liberation Day") shook global markets. While oil reacted mutedly, rumors that the US might seize Venezuela's state crypto reserves triggered deep anxiety regarding "sovereign-grade censorship resistance," causing BTC to retrace mid-week.4
2. Trump Media Files for "Crypto Blue Chip ETF" with Surprise Cronos Inclusion
   Trump Media & Technology Group filed an S-1 for an ETF comprising BTC (70%), ETH (15%), SOL (8%), XRP (2%), and Cronos (CRO, 5%). CRO's inclusion is seen as a massive political endorsement, driving the token's relative strength [26].
3. Bitcoin ETFs Bleed $680M as Capital Rotates to Altcoin ETFs
   Bitcoin ETFs ended their streak of inflows, led by outflows from BlackRock's IBIT. However, XRP and Solana ETFs recorded net inflows, signaling a structural rotation from "Pure Store of Value" to "High-Beta Utility" assets.2
4. JPMorgan Migrates JPM Coin to Canton Network
   JPMorgan announced the integration of its deposit token, JPM Coin, onto the Canton Network public chain. This marks the official entry of bank-backed tokens into the public chain ecosystem, directly challenging USDT's dominance in institutional settlement.11
5. US NFP Adds Only 50k Jobs, Missing Expectations
   Friday's data showed the US added only 50,000 jobs in December (vs. 73k expected), with unemployment dipping to 4.4%. Weak job growth has exacerbated recession fears, causing the market to re-price the Fed's rate cut path.
6. Rain Raises Massive $250M Series C at $1.95B Valuation
   Corporate stablecoin card issuer Rain secured $250M led by ICONIQ. This is the largest raise of 2026 so far, validating "Payments & Stablecoins" as the highest-conviction sector in the primary market.13
7. Miners Accelerate Pivot to AI Compute
   A CoinShares report reveals large miners are aggressively repurposing power infrastructure for AI/HPC. By late 2026, top miners' revenue share from Bitcoin mining is projected to drop below 20%, transforming them into "Energy Data Center REITs".14
8. Supreme Court Delays Tariff Ruling
   The US Supreme Court failed to issue a ruling on Trump's global tariffs this Friday. This legal vacuum leaves the market without clear direction, keeping Implied Volatility (IV) structurally high heading into next week.16
9. Hyperliquid (HYPE) Absorbs $300M Unlock
   Hyperliquid faced a massive ~$320M unlock this week (5.23% of circ. supply). While price stabilized, the massive supply shock drained significant liquidity from the DEX sector.18
10. Ripple Unlocks 1 Billion XRP
    Ripple executed its scheduled monthly unlock of 1 billion XRP. Despite the supply hit, XRP outperformed the broader market this week, driven by continued ETF speculation.

4. Sector Deep Dive

Data Source: DefiLlama (Weekly Change)

1. Real World Assets (RWA)

• Key Dynamics: Driven by moves from BlackRock and JPMorgan (Canton Network), tokens like Ondo and Chainlink remained active.
• Flows: Institutional capital is rotating from pure on-chain DeFi to compliant RWA protocols, seeking US Treasury yields combined with on-chain liquidity.
• Risk: Compliance costs are skyrocketing; smaller protocols face risks of being regulated out of existence or acquired.

2. Solana Ecosystem (DeFi & Memes)

• Key Dynamics: Despite the market correction, Solana TVL continued to grow, supported by steady ETF inflows.
• Flows: Retail capital continues to hunt for high volatility (Memecoins) on Solana, while institutions position via ETFs.
• Risk: Leverage remains high, with liquidation risks concentrated around the $128 level.3. Payments & Stablecoins
• Key Dynamics: Rain's massive funding and JPM Coin's public chain move are major catalysts.
• Flows: VCs are pouring into the payment infrastructure layer, betting on stablecoins eating into traditional cross-border payment markets.
• Risk: Bank-issued "Deposit Tokens" pose a long-term market share threat to USDT/USDC.

5. On-Chain Highlights

• Whale Activity: Addresses holding >1000 BTC showed no significant selling around $90,000, indicating Long-Term Holders (LTH) remain calm and view current volatility as noise.Stablecoin Supply: Total stablecoin supply contracted by ~$800M this week. The stagnation of inflows is the core reason for the market's lack of upward momentum.
• Active Addresses: Bitcoin network active addresses dropped to new lows since Dec 2024. On-chain transactional demand is weak; more volume is occurring in "Paper Bitcoin" layers like ETFs and futures.

• Futures OI: CME Open Interest remains flat at high levels, suggesting institutions haven't left but are hedging via options strategies.

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6. Funding & Project Updates

Key Unlocks/Events Next Week:

• Arbitrum (ARB): Jan 16, unlocking ~92.65M tokens (1.86%). Watch for sell pressure on L2s.
• Ondo (ONDO): Jan 18, massive unlock event. High volatility expected in RWA sector.
• TRUMP: Jan 18, unlocking 11.95% of circulating supply. PolitiFi sector likely to see extreme turbulence.

7. Regulation & Macro

• USA: The Supreme Court delayed its ruling on Trump's tariffs, extending uncertainty. The FDIC proposed new rules for bank-issued stablecoins under the "GENIUS Act," favoring compliant bank tokens.Global Tax: The UK's CARF and EU's DAC8 frameworks (effective Jan 1) are biting. Privacy-sensitive capital is actively migrating away from compliant exchanges to on-chain or offshore venues.ETFs: Morgan Stanley filed for Bitcoin and Solana ETFs, becoming the first major Wall Street bank to push for altcoin ETFs.

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8. Chart of the Week

1. Bitcoin Liquidation Heatmap: The $95,000 Short Wall
   The heatmap shows massive short liquidation liquidity piled up in the $95,000 - $95,500 zone. Market makers have a strong incentive to "hunt" this liquidity once consolidation ends.
    

   

2. ETF Flows: The Great Divergence
   BTC ETFs saw net outflows while XRP/SOL ETFs saw net inflows. This is the first significant divergence since launch, marking a structural shift in capital logic.

   

3. Fear & Greed Index: Sentiment Reset
   The index rapidly retreated from "Greed" last month to 27 (Fear). Historically, such rapid sentiment resets are often signals for establishing a mid-term bottom.

   

9. What to Watch Next Week

1. Jan 13 (Tue): US December CPI Data
   • Impact: Core inflation will dictate the Fed's late-January rate decision. If inflation rebounds, BTC could test $85k; if mild, a reclaim of $95k is in play.
2. Jan 18 (Sun): TRUMP Token Massive Unlock
   • Impact: An unlock of nearly 12% of circulating supply will shock the PolitiFi sector. Holders should hedge risk.
3. BlackRock & JPMorgan Moves
   • Impact: Watch for more banks joining the Canton Network and whether BlackRock launches a new marketing offensive for ETH/SOL ETFs.

10. Closing & CTA

This week, the market demonstrated resilience amidst geopolitical thunder but also revealed a scarcity of liquidity. We stand at the crossroads of the "Sovereign Censorship Resistance" narrative and the "Institutional Compliance" narrative. For investors, the key now is not blind longing, but identifying assets that stand to benefit from the "Institutional Great Rotation."

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Disclaimer:

This report is for informational purposes only and does not constitute investment advice. Cryptocurrency prices are highly volatile. Invest responsibly. AscendEX assumes no liability for the content of this report.