Macro FUD Hits, Crypto Pulls Back đ»
Crypto was moving sideways over the weekend, then slipped during early Asia trading. Too many traders were over-leveraged, so once prices dipped, more than $550m in long positions got wiped. $BTC briefly touched $86k, $ETH dropped to around $2.8k. Meanwhile, gold and silver kept pushing higher, which shows money is rotating into safer assets.
The sell-off wasnât really about crypto itself. It was driven by macro headlines piling up â Trump talking about 100% tariffs on Canada, growing odds of a US government shutdown, and uncertainty around Japan stepping in to defend the yen. When macro risk stacks up like this, traders usually reduce exposure across all risk assets, and crypto gets hit fast.
FX markets are already on edge. USD/JPY is still high, and nobody wants to be caught wrong-footed if Japan suddenly intervenes. That defensive positioning is bleeding into crypto sentiment as well.
US politics adds another layer of uncertainty. Budget negotiations are stuck, funding expires Jan 30, and markets are seriously pricing in a shutdown. Polymarket has the odds at around 75%, which explains why traders are hedging more aggressively. Options data shows higher volatility and more downside protection being bought.
Looking ahead, thereâs no shortage of catalysts â tech earnings, the Fed meeting, Powellâs guidance, plus ongoing political noise. With so many open risks, crypto prices are likely to stay choppy in the short term.
What weâre seeing is a risk-off move and leverage flush, not a breakdown of the crypto story. Macro uncertainty is calling the shots right now. Until thereâs clarity on the shutdown and broader policy direction, upside will be capped. Once that cloud lifts, conditions improve fast â but for now, staying patient and not forcing trades makes more sense than trying to catch every move.
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