Bitcoin Experiences Decline Amid Stock Market Rally, Yet Altcoins Show Unexpected Resilience

In a week marked by strong stock market gains, Bitcoin (BTC) struggled, falling by 2.57%. Despite this, select altcoins like XRP, SOL, and others demonstrated strength. The cryptocurrency market faced notable outflows from Bitcoin ETFs, but altcoins attracted new investments. On-chain data suggests that investors are adopting a patient approach as they await clearer regulations.

Key Takeaways

Bitcoin fell by 2.57% while stock markets, including the Russell 2000, saw gains.
Selective interest in altcoins like XRP and SOL indicated strength against the overall trend.
Bitcoin remain's within a narrow trading range, creating a period of compression.
ETF outflows from Bitcoin amounted to over $1.1 billion, indicating profit-taking rather than panic.
On-chain indicators suggest a patient market stance as investors await regulatory developments.

Bitcoin's Struggles Amidst Stock Market Gains

Bitcoin did not participate in the recent stock market rally, which saw major indices rise. Instead, BTC dropped by 2.57% over the past week. In contrast, the Russell 2000 was up by 4.6%, with the Nasdaq and S&P 500 also making gains. Notably, crypto market maker Wintermute reported that altcoins diverged from this trend, with increased interest shown in XRP, SOL, and other mid-cap tokens.

As gold and Treasuries gained traction amidst a weakening dollar, Brent crude prices also rose due to geopolitical supply concerns. However, the crypto market lagged considerably, with BTC decreasing by 1.94% and ETH dropping by 3.39%. Only select altcoins, such as SOL, TRON, and Monero, registered gains exceeding 2%, leaving Bitcoin among the poorest performers when compared to other assets.

BTC Shows Compression with Support Around $89–90k

Sharing insights from macro data, Jasper De Maere, an OTC trader at Wintermute, noted that Bitcoin initially surged from the high-$80,000 range but faced selling pressure, reaching a peak of $94,700. By midweek, it fell below $90,000, hitting a low around $89,200 before settling near $91,000.

Ethereum (ETH) followed a similar trajectory, climbing towards $3,220 early in the week and retreating to approximately $3,080 by the week’s close. Wintermute emphasized that "support lies in the $89–90k range, while resistance is between $94–95k," indicating the importance of this narrow trading range, which has shown lasting duration.

Since late November, Bitcoin has remained caught between the high-$80,000s and low-$90,000s, and this compression has reached particularly notable levels.

Bitcoin Altcoins Stock Rally - Wintermute Chart

The 30-day trading range is currently at the 91st percentile, signifying that price movements have seldom been this restricted. Such periods often denote consolidation phases where trading activity slows, leading to reduced volatility. Historical patterns suggest that Bitcoin typically enjoys positive returns 90 days after four similar consolidation phases.

ETF Outflows Counterbalance Early Gains

Last week, ETF flows varied significantly, beginning with an inflow of $471 million on January 2, followed by $697 million on January 5—marking the most substantial single-day influx since October. However, a swift reversal ensued as approximately $250 million exited on Tuesday, with further outflows of $485 million on Wednesday and $400 million on Thursday.

In total, over $1.1 billion departed from Bitcoin ETFs, almost matching the earlier gains dollar-for-dollar, while ETH-related products saw about $260 million leave as well. Despite these outflows, Jasper pointed out that they "didn’t feel like distribution," as there was no panic evident and trading volumes remained strong, indicating that quick investors were merely taking profits.

Meanwhile, altcoins garnered selective interest with XRP, SOL, and DOGE ETFs combining to attract around $100 million, contrasting with the redemption trends faced by larger tokens. Wintermute cautioned that while some altcoin performances emerged, they felt "selective and concentrated," emphasizing that "BTC needs to lead before broader risk appetite shifts down the curve."

On-Chain Data Reveals Market Patience

The upcoming CPI report, expected to show a 2.7% increase, and commentary from the Federal Reserve on stabilizing interest rates could serve as catalysts for potential market improvements this week. Wintermute concluded that "this phase appears to embody more consolidation than distribution" as the U.S. Senate Banking Committee prepares to review the CLARITY Act on January 15.

As price levels remain relatively steady, on-chain data from XWIN Research Japan indicates a shift in market behavior. Limited Bitcoin flows into exchanges suggest that traders are not viewing the legislative proceedings as a critical risk event requiring immediate action.

This sentiment is further reflected in the Spent Output Profit Ratio (SOPR), which remains around or just below the mark of 1.

Bitcoin Altcoins Stock Rally - Bitcoin Spent Output Profit Ratio Chart

This data implies that profit-taking is subdued, and on-chain movements of Bitcoin are low; in essence, Bitcoin is not being actively transacted. Altogether, these indicators suggest a market that is acting conservatively but patiently, with investors holding Bitcoin as they await clearer regulatory insights.