What's Causing Today's Crypto Market Decline? – January 7, 2026

The cryptocurrency market is experiencing a downturn today with the overall market capitalization dropping by 1.6% to $3.24 trillion. Currently, 65 out of the top 100 cryptocurrencies have decreased in value over the last 24 hours, while total trading volume sits at $150 billion.

Key Takeaways

Market Overview: The cryptocurrency market cap has decreased to $3.24 trillion, with significant drops in many major cryptocurrencies.
Major Cryptos: Bitcoin (BTC) is down by 1.9%, and Ethereum (ETH) has fallen by 0.5%.
Positive Performers: Tron (TRX) is the only top coin showing gains, increasing by 1.1%.
Regulatory News: The U.S. Department of Justice liquidated 57 BTC, raising concerns about asset management.
Economic Factors: Expectations of future interest rate cuts from the U.S. Federal Reserve could influence market liquidity.

Why Is Crypto Down Today

Crypto Winners & Losers

As of Wednesday morning, 9 of the top 10 cryptocurrencies by market cap have seen price declines in the last 24 hours.

Bitcoin (BTC) has decreased by 1.9%, trading at $91,799.
Ethereum (ETH) fell slightly by 0.5%, now priced at $3,211.
XRP recorded the largest decline at 4.7%, currently valued at $2.25.
Following BTC, Dogecoin (DOGE) fell by 1.6% to $0.1483.
The only cryptocurrency showing a gain among the top performers is Tron (TRX), with an increase of 1.1% to $0.2944.

Among the broader market, 65 cryptocurrencies reported losses. Provenance Blockchain (HASH) experienced a significant drop of 10.3%, now at $0.02686, followed by Mantle (MNT) down by 5.9% to $1.05. Conversely, Hyperliquid (HYPE) and MemeCore (M) saw increases of 3.4% and 3.2%, respectively.

Meanwhile, on November 3, 2025, the U.S. Department of Justice (DOJ) sold 57 BTC confiscated from Samourai Wallet developers via Coinbase Prime. Senator Cynthia Lummis expressed concern over this decision, highlighting that the U.S. should not waste strategic Bitcoin assets.

Market Expectations and Economic Insights

On Tuesday, US Federal Reserve Governor Stephen Miran indicated that the current interest rate policy is "clearly restrictive." He suggested that rate cuts exceeding 100 basis points may be warranted in 2026.

Analysts from Bitunix noted that Miran’s comments reflect a dovish attitude, contrasting sharply with other officials who believe that monetary policy is approaching neutrality. This divergence within the Fed may impact market behavior as forthcoming employment data could influence liquidity expectations.

Additionally, Fabian Dori, Chief Investment Officer at Sygnum, stressed the growing relevance of renewed demand for exchange-traded funds (ETFs) within the market. Increased ETF demand is absorbing circulating supply, which indicates potential long-term interest rather than simply temporary speculation.

As major banks, including Bank of America and Morgan Stanley, broaden access to spot Bitcoin ETFs, the market anticipates higher institutional involvement due to easing regulatory barriers.

Price Levels to Watch

Wednesday afternoon sees BTC priced at $91,799 after a volatile trading session. It tumbled from an intraday high of $94,343 to a low of $91,544. It has shown slight recovery but remains below previous highs.

For BTC to consolidate, it must maintain the $91,000 level, which could pave the way for a potential rise toward $94,000 or $96,000. If it drops below $90,000, a return to $85,000 may follow.

BTC Trading Levels

Ethereum also faced fluctuations, currently trading at $3,211. It reached peaks near $3,300 before falling to a low of $3,196. If ETH fails to hold above $3,100, it could descend to $2,900, while a sustained rally could see it rise toward $3,600 and $3,800.

The crypto market sentiment remains neutral, with the crypto fear and greed index holding at 49, indicating a cautious optimism after a brief period out of the fear zone since the year's start.

Market Sentiment Index

In recent days, the U.S. Bitcoin spot ETFs recorded negative net flows, losing $243.24 million. This has adjusted total net inflows back to $57.54 billion, with only one ETF, BlackRock, experiencing positive inflow.

Conversely, U.S. Ethereum ETFs reported positive flows for the third consecutive day, adding $114.74 million to total net inflows of $12.79 billion across nine funds.

Fund Flows

Lastly, the index provider MSCI announced plans to exclude digital asset treasury companies from its equity indexes, indicating a need for further research on the distinctions between traditional investment companies and those holding digital assets as part of core operations.

Final Insights

Today's crypto market has experienced some losses, contrasting with a positive performance in the U.S. stock market, where the S&P 500 and others closed higher. Analysts emphasize that while there's potential for upward price movement, the trajectory will largely depend on upcoming macroeconomic developments.