Macro update

After a strong first week, crypto underperformed. Russell 2k led at +4.6%, gold and Treasuries caught a bid as the dollar softened, Nasdaq and S&P posted gains but lagged small caps. Brent firmed on geopolitical supply concerns. Crypto sat at the bottom: altcoins +0.6%, BTC -0.6%, ETH -0.7%. With everything from small caps to safe havens working, the weakness in crypto seemed to be flow-specific, not macro.

BTC rallied from the high-$80k range early in the week, briefly touching $94.7k before sellers stepped in. By midweek, price had slipped below $90k, printing a low around $89.2k before stabilising near $91k. ETH tracked a similar arc, up toward $3,220 early, back to $3,080 by week's end. The pattern since December continued: rallies into the mid-$90s get sold. For now, $89–90k is support, $94–95k is resistance.

This narrow trading range is worth some attention. Since late November, BTC has been stuck between the high-$80s and low-$90s, and that compression is now extreme. The 30-day trading range sits at the 91st percentile, meaning we've rarely seen price action this narrow. These periods tend to mark consolidation phases where the pace of hands changing slows and volatility collapses. What's interesting is what happens when this narrow range breaks and volatility returns. Looking historically at similar compressions, BTC has posted positive returns 90 days out three out of four times.

Another big driver last week were the ETF flows. We started strong: $471M on Jan 2, then $697M on Jan 5, the best single-day print since October. Then a full reversal. ~$250M out Tuesday, ~$485M Wednesday, ~400M Thursday. Over $1.1B gone, erasing the early gains almost dollar-for-dollar. ETH bled ~$260M alongside. It didn't feel like distribution though. No panic, volumes stayed healthy. Fast money booked profits and stepped aside.

Meanwhile, alts caught a (selective) bid. XRP, SOL, and DOGE ETFs pulled in ~$100M combined while majors faced redemptions. Spot followed the same pattern with XRP ripping double digits, SOL mid-singles. BTC dominance slipped below 59%. While there was some alt performance, it felt  selective, concentrated in names with ETF flows or their own catalysts. Currently the consensus still seems to be that BTC still needs to lead before risk moves down the curve.

Looking ahead, CPI prints Wednesday (2.7% expected) and the CLARITY Act goes to Senate vote on Friday. More catalysts than we've had in weeks. Meanwhile, the structural build continues underneath the flow noise. Morgan Stanley filed for BTC, ETH, and SOL ETFs, becoming the first major bank to go from distributor to manufacturer. The SOL filing includes staking, which tells you something about where regulators' heads are at. Bank of America opened up advisor recommendations. These players aren't trading for the next five weeks. They're building for the next five years. The plumbing is going in.

Our take:

“This phase is more consolidation than distribution."

Yes, crypto lagged a risk-on week and ETF flows reversed. That said, the $89–90k level held cleanly, leverage got flushed without forced liquidation, volumes stayed healthy. The price action doesn't suggest distribution. Distribution is rallies sold into with no bid underneath, deteriorating structure, and smart money heading for the exits. This looks more like tactical rotation: profits booked on strength, positioning reset, capital waiting for the next entry. The floor keeps getting tested and it keeps holding.

The backdrop supports this read. Morgan Stanley filing for in-house ETFs, Bank of America opening up advisor recs, CLARITY heading to vote. These aren't the moves you make at a top. Patient capital is accumulating even as near-term flows chop. CPI and CLARITY are the swing factors this week. Soft print keeps rate cuts in play, passage removes a longstanding overhang. That should be enough to break us out of this range. The risk is a hot CPI that keeps the Fed on hold, but even then, the floor feels solid. Structure favours higher once macro cooperates.