- Sebastjan Bele
- Updated: January 8, 2026
- Reading time: 6 min
BTC Failed Breakout, Zcash Developers Resign and Polymarket Partners With Dow Jones
Happy New Year and welcome back to Diary of a Market Makerafter a short break.
Markets started the week with a brief rally, with Bitcoin pushing up to $94K, but the move quickly faded and BTC is now trading below $90K. Sentiment weakened further as U.S. spot Bitcoin ETFs recorded more than $486 million in outflows, signaling renewed caution from investors.
In other developments, Zcash developers resigned and formed a new company following a board dispute, while Polymarket will begin providing prediction data to The Wall Street Journal and Barron’s as part of a Dow Jones partnership. World Liberty Financial applied for an OCC Trust Bank charter, and JPMorgan expanded JPM Coin to Canton, marking its second network extension after Base. Kalshi’s CEO endorsed a bill banning insider trading on prediction markets, and spot XRP ETFs saw their first net outflows since launch, totaling $41 million.
News
- Bitcoin and Ether ease after early January pop as markets price Fed cuts
- Zcash developers quit project and form new company after board clash
- Polymarket to provide prediction data to Wall Street Journal and Barron’s in Dow Jones deal
- Spot XRP ETFs see first net outflows since debut, totaling $41 million
- Kalshi CEO endorses bill banning insider trading on prediction markets
- a16z Crypto buys $15 million in BABY tokens to fund Babylon’s BTC vault buildout
- JPMorgan brings JPM Coin to Canton after launch on Base
- Strategy stock rallies as MSCI says it will not bar DATs for now
- Wyoming issues state-backed FRNT stable token on Solana
- Morgan Stanley launches spot Ethereum ETF
Table of Contents
Markets
Best Performers
The year started strong for Render ($RENDER), extending its momentum after a solid end to last year. On the meme side, Pepe ($PEPE) and Bonk ($BONK), two of the most iconic meme coins, posted solid gains, reflecting renewed risk appetite. The top 5 was rounded out by Virtuals Protocol ($VIRTUAL) and Stacks ($STX), both showing strong weekly performance and keeping pace with the broader market rebound.
Sector Performance
According to GMCI, the GMCI 30, which tracks the top 30 cryptocurrencies, is up 5.79% over the past week. The GMCI Mid Cap is up 14.69%, while GMCI Small Cap indices is also up 13.98%. The rest of the sectors:
- Layer 1: +5.33%
- Layer 2: +14.55%
- DeFi: +6.75%
- AI: +33.95%
- Gaming: +13.31%
- Meme: +28.23%
US Spot ETF Balances
US Bitcoin Spot ETFs
Total Assets Under Management (AUM) = $122.37 Billion
US Ethereum Spot ETFs
Total Assets Under Management (AUM) = $17.52 Billion
*The data for BTC / ETH ETFs can vary, so we use Coinglass as our source.
Market Commentary
Bitcoin
Markets reacted bullishly to news around U.S. operations in Venezuela, triggering a rally that pushed BTC through the $92K resistance. However, the move failed to hold, and price quickly corrected. Bitcoin is now trading around $90K.
For a sustained move higher, we want to see the weekly resistance at $92K clearly broken and confirmed as support. As a reminder, the more times a resistance or support level is tested, the weaker it becomes.
If BTC is rejected again, the next focus shifts to the range lows around $87K. For now, the range is clearly defined between $92K and $87K, with choppy price action dominating.
Ethereum
$ETH weekly support at $3,000 held, and price is now trading in no man’s land between weekly support and the range high at monthly resistance. The choppy market conditions make positioning difficult, so patience remains key.
Bullish case: ETH pushes back to monthly resistance, where we would wait for a reaction. Our base case is an initial rejection, but multiple factors could influence the outcome. If monthly resistance flips into support, this would offer a good long setup, with upside targeting weekly resistance around $3,900.
Bearish case: ETH trades toward the range low at $2,900, where we would potentially look for a long setup, reassessing structure and momentum before positioning.
Bitcoin dominance increased to 58.4.
In traditional markets:
- S&P 500 up 0.92%
- NASDAQ up 1.71%
- Gold up 2.55%
The total crypto market cap stands at $3.09 trillion. The Fear & Greed Index is at 28 (Fear).
What's Next?
From a macro perspective, quantitative expansion is underway. The U.S. dollar continues to weaken, and capital is actively seeking hedges against inflation, with gold performing strongly and likely to remain supported in the near term. Global money supply growth has just reached 9.9%, a level last seen in July 2020, when stimulus checks were being distributed and markets were reacting to the COVID shock.
Against this backdrop, we believe the question is when, not if, this expanding pool of liquidity also flows into crypto.
Spot Bitcoin ETFs started 2026 with roughly $1.2B in inflows over the first two trading days, underscoring persistent institutional demand. MSCI confirmed it will not exclude digital asset treasury companies (DATCOs) from its global indexes in February 2026, removing a potential overhang. At the same time, tokenized stocks have surpassed $1B in total AUM, growing more than 50x over the past year. xStock leads the space with over $600M in AUM and 58.3% market share, while Ondo Global Markets has seen rapid expansion on BNB Chain, with tokenized stock AUM exceeding $50M. Together with Ethereum, these networks now represent 39% of total market share.
Taken together, these developments suggest that appetite for crypto remains strong, and it is increasingly unlikely that this demand fades away.
Against this backdrop, we believe the question is when, not if, this expanding pool of liquidity also flows into crypto.
Meme of the Week
We hope you enjoyed this week’s edition of Diary of a Market Maker! Stay tuned for more insights, updates, and market-moving highlights as we continue to keep you informed and entertained in the ever-evolving world of crypto.
In the meantime, follow us on LinkedIn and X (Twitter) for real-time updates and more!
Until next time, happy trading and stay ahead of the curve!
Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, investment, or other professional advice. All opinions expressed herein are solely those of the author and do not represent the views or opinions of any entity with which the author may be associated. Investing in financial markets involves risk, including the potential loss of principal. Readers should perform their own research and consult with a licensed financial advisor before making any investment decisions. Past performance is not indicative of future results.
Jakob Brezigar
Jakob, an experienced specialist in the field of cryptocurrency market making, boasts an extensive international presence. With Orcabay, he has skillfully managed major operations and deals for a wide array of global stakeholders.
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