Matrixport Market Watch: Crypto Market Repair Window Opens, Structure and Sentiment Warm Up Simultaneously
Matrixport Market Watch: Crypto Market Enters Recovery Phase with Improving Structure and Sentiment
The crypto market has begun 2026 with a positive recovery, as BTC and ETH posted significant gains in the first week. This rebound follows the fading of year-end 2025 selling pressure, particularly from U.S. tax-loss harvesting. Key drivers include the return of normal trading activity post-holidays, the dissipation of concentrated selling, and fresh capital inflows, especially from Asian markets.
Macro conditions remain supportive, with the Federal Reserve continuing its rate cut path and lowering the federal funds rate to 3.50%-3.75% by end-2025. Softer inflation and a cooling labor market suggest further monetary easing is possible in 2026. While geopolitical events caused brief risk-off sentiment, they were quickly absorbed as short-term noise.
On-chain data indicates strengthening fundamentals: BTC and ETH are experiencing net outflows from exchanges, reducing immediate sell-side pressure; stablecoin market cap is rising again, providing more on-chain liquidity for crypto purchases; and network activity, measured by daily active addresses, is recovering.
Derivatives markets signal a clear shift in sentiment from defensive to cautiously optimistic. Implied volatility (IV) has dropped to near two-year lows, indicating lower expectations for extreme near-term price swings. The 25-delta skew for BTC options has turned positive, showing reduced demand for downside protection and increased interest in upside calls.
For investors, structured products like FCN/dual currency instruments (for range-bound markets), discount accumulators (for gradual accumulation), and decumulators/covered calls (for profit-taking or hedging) are suggested to align with current market conditions.
In summary, the market is in a post-correction recovery phase, supported by improved macro liquidity, tighter on-chain supply, and warmer derivatives sentiment. However, the next sustained uptrend will depend on a decisive break above key resistance levels.
*Content provided by Daniel Yu, Head of Asset Management. This represents the author's personal views only. Disclaimer: Markets are risky; invest with caution. This is not investment advice.*
marsbit01/07 08:18
