BlackRock’s IBIT ETF Shows First Bearish Crossover Amid Market Fluctuations
BlackRock’s iShares Bitcoin Trust ETF (IBIT) has formed its first-ever bearish crossover, with the 50-day simple moving average (SMA) dipping below the 200-day SMA. This technical signal, widely regarded as a potential indicator of a bearish reversal, is raising concerns among investors as Bitcoin (BTC) hovers around $91,792.
Data from SoSoValue shows that US Bitcoin spot ETFs experienced net outflows of $77.3 million yesterday. Despite the overall trend, IBIT recorded the largest inflows, while Fidelity’s FBTC ETF posted the largest outflows. Currently, total assets under management (AUM) for these ETFs stand at $119.9 billion, reflecting the growing, but still volatile role of cryptocurrencies within the traditional financial system.
Government Shutdown Risks Add Pressure to Crypto Markets
Adding to market uncertainty, the forecasting platform Calchi estimates a 43% probability of a US government shutdown on January 31, 2026—the highest since last year’s fiscal crisis. The risk has surged sharply since mid-November. Analysts at Goldman Sachs estimate a 40-50% chance, while JPMorgan sees a 20-40% probability of a funding shutdown in early 2026.
Short-term disruptions could reduce weekly GDP by just 0.1-0.2%, with most losses recoverable. However, a prolonged shutdown, driven by debates over funding and spending on the Affordable Care Act, could inflict broader economic damage, increasing uncertainty for risk assets including cryptocurrencies.
Altcoin Markets Show Early Signs of Potential Rally
Meanwhile, altcoins are signaling intriguing dynamics. Trader Merlin’s analysis of altcoin market capitalization versus Bitcoin highlights a bullish retest after 1,100 days of volatility, a pattern previously observed in Ethereum relative to Bitcoin. Historical trends suggest such retests often precede strong altcoin rallies, which could indicate a shift in Bitcoin’s market dominance in the near future.
Cryptocurrency Liquidity and Unrealized Losses Highlight Risk
Glassnode data reveals approximately $350 billion in unrealized losses across the crypto ecosystem, including $85 billion in Bitcoin alone. On-chain indicators also point to declining liquidity, potentially paving the way for increased volatility in the coming weeks. Additionally, Bitcoin call options at $100,000 expiring on January 30 suggest a 70% implied probability that BTC will close at or below that strike, according to Black-Scholes pricing models.
Regulatory Push for Bitcoin in Retirement Plans
On the regulatory front, a bipartisan group of U.S. House Financial Services Committee members, led by Patrick McHenry and Maxine Waters, sent a letter to SEC Chairman Paul Atkins urging approval for the inclusion of Bitcoin and other cryptocurrencies in 401(k) retirement plans.
The letter references Executive Order 14330, issued in August, emphasizing the need to expand access to alternative assets for retirement savings. With Americans holding $9 trillion in these accounts, approval could trigger massive inflows into digital currencies, further accelerating the integration of crypto into traditional financial markets.
Crypto Faces Technical and Regulatory Crossroads
Between technical bearish signals, liquidity concerns, and regulatory developments, the cryptocurrency market stands at a critical crossroads. While Bitcoin faces short-term volatility risks, broader adoption in retirement accounts and potential altcoin rallies suggest long-term growth opportunities remain robust. Investors are closely watching these developments as crypto continues to intertwine with mainstream finance.
