Crypto Market Update (January 7): Price Drops for BTC, ADA, ZEC, and XLM Following Profit-Taking

Crypto prices experienced a slight decline today as investors opted to take profits following strong gains earlier in January 2028.

Key Takeaways

The total crypto market cap decreased by 0.8% to $3.27 trillion.
Bitcoin (BTC) is trading at $92,660, down 1.4% in the last 24 hours.
Altcoins such as Cardano (ADA), Zcash (ZEC), and Stellar (XLM) saw more significant declines of 3.2%, 2.8%, and 4.7%, respectively.
Despite the drops, market sentiment remains neutral, and indications point towards repositioning rather than panic selling.

Chart showing crypto prices today decline

Market Overview

The overall cryptocurrency market saw a 0.8% drop in total market capitalization, landing at $3.27 trillion. As of the latest update, Bitcoin was priced at $92,660, marking a 1.4% decrease over the previous 24 hours after failing to maintain recent high trading levels.

Losses were notably more significant among altcoins. Cardano (ADA) fell by 3.2%, settling at $0.4118; Zcash (ZEC) declined by 2.8% to $49.50; and Stellar (XLM) dropped by 4.7% to $0.2401. These movements followed a series of gains that ushered in a robust beginning to 2026.

Data from CoinGlass suggests the recent pullback occurred without widespread panic. The 24-hour liquidations rose by 3% to reach $436 million, while total open interest climbed by 1.02% to $141 billion. An increase in open interest during a price drop typically indicates reassessing positions rather than forced exits.

The average relative strength index (RSI) for the cryptocurrency market currently sits at 55, signifying a neutral momentum. Sentiment remains cautious, with the Crypto Fear & Greed Index dipping by two points to 42, still within the “fear” territory following a minor uptick earlier in the week.

Reasons Behind the Decline

Analysts attribute the downturn to profit-taking as traders secure gains following substantial rebounds from the lows of late 2025. In early January, Bitcoin rose approximately 7-8% from around $88,000, leading many short-term traders to solidify their profits.

Market dynamics during U.S. trading hours have also influenced this behavior. Recent patterns show that strength gained overnight tends to diminish when Western markets open, resulting in an increase in sell volume during U.S. hours. Funding rates have subsequently cooled, approaching neutral levels, supporting the notion that leverage in the market is being reduced rather than aggressively increased.

Traders still exercise caution due to the previous year's sell-off. After the late 2025 correction, which saw Bitcoin lose nearly 30% from its peak, traders appear quicker to lower exposure during upward movements.

Short-term Analysis and Forecast

Bitcoin is largely expected to maintain its position within the range of $90,000 and $92,000, with resistance around $94,000 to $95,000. If there is an uptick in institutional flows, a breakout above this resistance could potentially lead to prices reaching $97,000 to $100,000.

However, downside risks persist. Some analysts caution that if Bitcoin does not manage to reclaim the $94,000 mark, it could lead to a retest of the $85,000 to $88,000 levels, especially with U.S. labor data due later this week, including ADP jobs figures on January 7 and nonfarm payroll data on January 9.

Fundstrat's Tom Lee remains upbeat about the market, projecting that Bitcoin could achieve a new all-time high by the end of January. Conversely, others note that the drop in Bitcoin's dominance, which is now below 59%, may indicate a potential shift towards altcoins if market conditions stabilize.