The cryptocurrency market faced significant pressure in the early hours of the Asian session after trading in a narrow range over the weekend due to rising macroeconomic concerns. With leveraged long positions seeing liquidations exceeding 550 million dollars, Bitcoin tested and found support at 86,000 dollars, while Ethereum dropped to the 2,785-dollar area. During the same period, a flight to safety among investors strengthened, leading traditional safe havens like gold and silver to continue their ascent. This situation highlighted once again the sensitivity of crypto assets to global macro developments.
Macroeconomic Pressures Weigh on Crypto Markets
Multiple global developments fueled the wave of selling seen in Asian trades. U.S. President Donald Trump’s statements about potentially imposing tariffs of up to 100% on imports from Canada exacerbated tensions on the trade front. Concurrently, the risk of stalled budget negotiations in Washington brought the possibility of a partial federal government shutdown back into focus. These factors were among the key elements intensifying selling pressure on risky assets.
In the foreign exchange market, uncertainties centered around the Japanese yen influenced investor behavior. Although the USD/JPY “exchange control” intervention by the New York Fed on Friday was not seen as a direct intervention signal, it reminded of the delicate balance between the U.S. and Japan against the yen’s excessive depreciation. As the 160 level was perceived as a critical threshold, investors were prompted to unwind short yen positions, while the pair hovered near a two-month high of around 154, leading to a more cautious stance in global portfolios.
Meanwhile, a declaration from the North American front partially reduced uncertainty. Canadian Prime Minister Mark Carney announced that his country had no intention of entering a free trade agreement with China, thereby limiting trade-related concerns. Nevertheless, fiscal timeline risks in the U.S. continued to exert pressure on the cryptocurrency market.
Derivatives Markets and Calendar Pressure
In U.S. domestic politics, attention turned to budget negotiations. House Republicans pushed forward proposals including approximately 64.4 billion dollars for the Department of Homeland Security and border security, while Senate Democrats expressed their intent to block these measures. With current federal funding set to expire on January 30, the failure to reach a consensus by the weekend could bring the prospect of a partial government shutdown back into the picture. Markets recall the previous fall’s political deadlock coinciding with sharp losses in crypto assets.
This risk sentiment also reflected in prediction markets. Polymarket data indicated around a 75% probability of a shutdown before January 31. With increasing uncertainty, defensive positioning became evident in crypto derivatives markets; an upsurge in put weight and implied volatility across all maturities was notable. Particularly noteworthy transactions included Bitcoin 88,000-dollar puts dated January 30, 2026, being shifted to 85,000-dollar levels.
In the coming days, the macro calendar remains busy. Earnings reports from major tech companies and the Federal Reserve’s interest rate decision scheduled for Wednesday are crucial for global pricing considerations. While no changes in rates are anticipated, Chairman Jerome Powell’s forward-looking statements will be closely followed. Unresolved political and geopolitical risks set the stage for volatile fluctuations in crypto prices short term.
