The cryptocurrency market has shed $120 billion this week after January’s recovery curve stalled. In particular, Bitcoin’s rebound, which was lifted by over $1 billion in ETF inflows, reversed by mid-week. 

According to SoSo Value’s data, U.S Spot ETFs saw $729 million in total outflows on Tuesday and Wednesday. 

Source: SoSo Value

Over the same period, Bitcoin’s price shed over $4,500 and dropped from $94,500 to $90,000 on the price charts. 

Fed rate pause ahead?

The market sentiment was further soured by the expectation of a Fed rate pause at the meeting scheduled for 29 January. Over the past two days, the odds of a rate pause rose by 4% to 86.7%. 

The Jobs report and inflation data scheduled for 9 and 14 January could further affect the rate cut outlook and drive the market sentiment for risk assets.  

Source: CME FedWatch

However, the current rate pause outlook at 3.50%-3.75% further dragged crypto lower.

However, it must be noted that although BTC fell by 5%, major altcoins dumped even harder during the mid-week retreat.

XRP and ETH cool off

XRP, for example, depreciated by 14% from $2.4 to $2, reversing nearly half of its significant January gains. 

Source: XRP/USDT, TradingView 

Near-term bulls could track the $2-support zone as a possible reversal point. The area also coincided with the 50-day Moving Average (MA) that could reinforce short-term bullish momentum if defended. 

However, a break below it could send XRP’s price to the recent lows near $1.80. Here, it’s worth pointing out that the altcoin also saw massive whale interest during the early 2026 recovery – A trend that could trigger a swift reversal if market sentiment improves. 

Like BTC, Ethereum’s [ETH] price also dropped by about 6% from $3,300 to $3,000. December’s price action chalked a symmetric triangle pattern that could go either way. However, in the event of a bullish breakout, the immediate target would be $3,600.  

Source: ETH/USDT, TradingView 

On the contrary, a dip below $2.9k would indicate a bearish breakout and likely lead to further price compression. 

Even so, the altcoin season index reading jumped from 25 to a neutral reading of 57 at press time – A sign that alluded to a considerable rebound for the sector in January, despite the recent cool-off. 

Final Thoughts

• A pause on institutional demand for BTC and crypto triggered a mid-week cool-off among top altcoins.
• XRP and ETH’s position above key short-term moving averages seemed to reinforce bullish momentum at press time.