Weekly Crypto Market Update January 16, 2026

The second week of 2026 finally delivered the first real fireworks we’ve seen in a while, with Bitcoin breaking out of its multi-month trading range and Ethereum staking hitting all-time highs amid softer inflation data and renewed institutional flows. From macro relief to altcoin surges like Monero’s privacy breakout, the market showed signs of life after the Holiday season’s choppy price action—though regulatory hurdles like the delayed CLARITY Act will keep traders on edge.

Markets exhaled after December core CPI printed softer at 2.6% year-over-year (versus 2.7–2.8% expected), reinforcing the disinflation progress and steady demand via tame producer prices and retail sales, which together bolster Fed easing odds without signaling recession risks.

Bitcoin’s decisive upside break, its first real move in over a month, came alongside $1.7 billion in spot ETF inflows over three days, though pullbacks tested new support levels.

Ethereum dominated narratives with staking highs, institutional bets like BitMine’s $6 billion position, and analysts forecasting altcoin rotation as the ETH/BTC ratio grinds higher. Monero surged to new all-time highs on privacy demand amid global reporting rules. However, security stays precarious: Trust Wallet’s $8.5 million worm attack (fully reimbursed) and Ledger’s data exposure tied to old LastPass flaws reminded users of persistent wallet risks. 

Regulation saw the SEC launch Project Crypto for clearer token/DeFi rules, but faced Democratic pushback over perceived softness, while the CLARITY Act markup got delayed to late January after Coinbase withdrew support. Next week’s Fed speakers, $2.2 billion BTC/ETH options expiry, and industrial production data set the stage for volatility as BTC eyes $100k confirmation.

Let’s dive in deeper.

Macroeconomic and Institutional Landscape

This week’s macro story was all about whether disinflation is still on track and how much room that gives the Fed to ease later this year. 

Core U.S. inflation for December came in slightly softer than expected, with core CPI around 2.6% year‑on‑year versus forecasts closer to 2.7–2.8%, easing fears of a renewed price spike and giving markets more confidence that the Fed can eventually shift toward gradual policy easing later in 2026. Headline CPI is still above the Fed’s 2% target, but the clear downtrend from the post‑pandemic peaks reinforces the idea that the “last mile” of disinflation is progressing, just more slowly than in 2024–2025.

At the same time, producer prices and retail sales are pointing to steady but not overheating demand, which, combined with cooling inflation, supports equities and crypto while strengthening the narrative that the U.S. is in a slow‑growth, disinflationary but not outright recessionary environment.

Future of Clarity Act Not So Clear

The Digital Asset Market CLARITY Act hit its biggest political speed bump yet this week. After months of buildup and a long‑planned January 15 markup, Senate committees abruptly delayed their sessions to the end of the month amid last‑minute opposition from key industry players and lingering partisan disagreements over stablecoin yields, DeFi oversight, and the SEC–CFTC split. 

Coinbase’s CEO, Brian Armstrong, pulled his support on the eve of the Senate Banking Committee debate, warning that the latest draft could cripple core revenue lines, while state regulators and some Democrats argued the bill still weakens investor protections, forcing leadership to postpone rather than risk a failed vote that could push comprehensive U.S. crypto market‑structure reform off the 2026 agenda entirely.

There has been major pushback from the banking industry (unsurprisingly), who want to handicap stablecoin yields and DeFi permissions. It is unclear exactly how things will play out. The CLARITY act remains the single most pivotal piece of crypto regulation so far, and has the potential to either provide tremendous help or harm to the industry. 

Bitcoin and Ethereum Deep Dive

If you follow our weekly newsletters, you’ll know that I have been talking about our crypto market leaders trading ranges. Both Bitcoin and Ethereum have been stuck in a sideways trading range since late November, failing to break out multiple times. Well… Bitcoin finally broke out of its trading channel earlier this week. 

BTC managed to break above that ~$94,000 level on Tuesday, before reaching a weekly high of just under $98,000. Now it did end up retracing a bit these last two days, but it is still trading at $94,500 – outside of its previous range. 

We would like to see this move extend to the $100,000 level in the next week in order to confirm this is a true breakout. Either way, this is an encouraging sign of life from Bitcoin, and the first real decisive price move in over a month. 

Ethereum also had a good week and is up over the last 7 days. ETH is back trading above $3,200 once again. 

ETH managed to close above its previous high close of $3,330 – the top of its trading range. However, it was unable to close above that level multiple times and did not decisively break and hold above that resistance level. It’s a bit too early to consider this a true breakout for ETH just yet… it needs another push before I feel confident in calling it a true breakout of its trading range. 

The timing of this surge in crypto prices aligns perfectly with softer CPI data and renewed ETF inflows, suggesting institutional momentum is finally kicking in after weeks of chop. Holding above these new levels over the weekend will be critical to sustain the bullish momentum into next week’s macro data.

Weekly Narrative Spotlight

Ethereum’s staking milestone and outperformance narrative dominated headlines this week, as the network hit a staggering new record with nearly 30% of its circulating supply, valued at over $120 billion, now locked in staking contracts. This surge was turbocharged by major moves like BitMine Immersion Technologies boosting its ETH stake by another $600 million to a total of roughly $6 billion, underscoring how large-scale validators are doubling down on Ethereum’s proof-of-stake security model amid rising network activity and yield opportunities.

Standard Chartered joined heavyweights like Fundstrat’s Tom Lee in declaring 2026 the definitive “year of Ethereum,” citing a cocktail of tailwinds: explosive growth in new wallet creation, stablecoin inflows on Ethereum Layer 1 and L2s, record spot ETH ETF inflows flipping Bitcoin’s for several sessions, and a steadily improving ETH/BTC trading ratio that hints at capital rotation from BTC dominance into altcoin upside. The narrative framing ETH as the “real play” on DeFi expansion, tokenization, and Web3 infrastructure resonated widely, with analysts pointing to Ethereum’s unmatched developer ecosystem, maturing rollups, and upcoming upgrades as structural advantages over competitors, positioning it to capture value as crypto liquidity broadens beyond pure Bitcoin exposure.

Additionally, privacy coin Monero (XMR) staged a sharp breakout this week, surging to new all-time highs of just under $800 after essentially 5 years of consolidation. 

This move was fueled by renewed retail interest in censorship-resistant assets amid U.S. regulatory headlines and global stablecoin reporting mandates. On-chain metrics showed spiking transaction volume and active addresses, while traders cited XMR’s fixed supply issuance and battle-tested privacy tech as hedges against escalating surveillance trends, sparking talk of a “privacy renaissance” if macro conditions favor risk assets further. This comes just a few months after Zcash’s (ZEC) massive breakout, leading to further evidence of a surge in privacy tech. 

Regulatory and Security Watch

Regulatory headlines this week were dominated by the SEC’s rollout of Project Crypto, a major policy shift under new leadership that introduces an “innovation exemption” and moves away from pure enforcement toward clearer rules on token classification, custody, and DeFi compliance. These moves could ease barriers for institutions but drew fire from House Democrats, who accused the agency of going soft on cases involving Binance, Coinbase, and Tron’s Justin Sun.

On the security front, Trust Wallet (Binance‑owned) confirmed a supply chain attack via a self‑replicating worm that drained about $8.5 million from 2,520 wallets, prompting full reimbursements, while Ledger disclosed a third‑party breach exposing customer order data (but no keys or funds) and ongoing crypto thefts traced back to the 2022 LastPass hack, underscoring persistent risks in wallet ecosystems.

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