Archax Weekly Market Update, Jan 26, 2026

Crypto opens the week under modest pressure, with Bitcoin trading just below $88,000 and Ethereum holding around $2,900, as markets position cautiously into one of the most consequential macro weeks of the quarter. The tone is less about crypto-specific weakness and more about a familiar pre-event dynamic: investors are reducing exposure at the high-beta end of risk ahead of the Federal Reserve decision and a dense slate of big tech earnings.

The Fed meeting sits at the centre of that positioning. Markets are broadly expecting the Fed to hold rates steady, but the decision itself is unlikely to be the main driver. Instead, attention will fall on Chair Powell’s framing of the path ahead. Wil the Fed signal a “dovish pause” that keeps the door open to further easing later in 2026, or will it lean more cautious, reinforcing the idea that the cutting cycle is slowing even as growth softens. For crypto this matters because Bitcoin continues to behave as a liquidity-sensitive asset: it tends to perform best when investors believe the direction of policy is easing and that financial conditions will remain supportive.

The dollar is the other key channel. If Powell’s messaging pushes markets toward pricing fewer cuts, the USD could strengthen at the margin, which historically tightens conditions for risk assets and creates headwinds for crypto. If the Fed puts more emphasis on labour market weakness, the dollar may fall and conditions may ease, which would improve the near-term setup for Bitcoin. The key point is that crypto’s sensitivity is unlikely to be to the headline decision, but to whether the meeting re-anchors expectations around the policy path and the dollar’s direction.

That sensitivity helps explain why Bitcoin’s drift below $88,000 has weighed disproportionately on sentiment. In a market where depth remains thin, breaks of visible levels often trigger systematic de-risking and encourage cautious positioning until the calendar clears. The result is a market that can stabilise quickly once uncertainty passes, but which struggles to build sustained momentum while major macro and earnings catalysts remain unresolved.

Cross-asset signals reinforce that caution. Investors are watching whether the AI-led equity complex can maintain leadership through earnings this week, because those names continue to sit at the core of global risk allocation. If big tech results are strong and the Fed avoids surprising hawkishness, the setup becomes more constructive for risk. If either disappoints, the path of least resistance remains toward volatility and selective de-risking, which typically spills into crypto first.

Taken together, the message is becoming clearer. Crypto is not lacking longer-term structural tailwinds, but near-term price action is being dominated by event risk. The Fed’s decision and Powell’s tone will shape expectations for the dollar and the policy path, while earnings will determine whether investors are willing to re-expand risk at the core of the equity complex. If both lean supportive, the conditions are in place for crypto to recover lost ground. If they don’t, the market is likely to remain range-bound, with rallies fragile and volatility driven by the next macro repricing.