Crypto Recovery Rally Loses Momentum: Americas Daybook

Major digital currencies such as bitcoin, XRP, and solana have declined over 1.5% in the last 24 hours, with all 16 CoinDesk sector indexes in the red, led by a 3.6% drop in the DeFi Select Index. The downturn has raised questions about whether the year's start was driven by genuine buying conviction or seasonal factors like new year allocations. A potential indicator could be the U.S.-listed spot bitcoin ETFs, which saw over $1 billion in inflows in the first two trading days of 2026, only to lose $243 million on Tuesday. According to Samer Hasn, a senior market analyst, "The pullback reflects the fragility of the recent rally, with price action still sensitive to shifts in liquidity and seasonal factors rather than driven by conviction buying." Hasn noted that signs of improving liquidity supported the recent advance but remain uneven, explaining the fading upside momentum. The Coinbase Premium, measuring the difference between BTC's price on Coinbase and Binance, remains negative, indicating U.S. investors have yet to join the rally. However, the derivatives market shows some positive signs, with cumulative crypto futures open interest rising to a nearly two-month high, pointing to renewed investor willingness to take risk. Funding rates are also improving, with Glassnode stating that sustained market advances tend to coincide with funding rates consistently above 0.01%, suggesting current conditions remain supportive but not yet decisive. In traditional markets, Japanese government bond yields have hit a record high, raising concerns about risk assets, including BTC. Bitcoin's correlation with the yen has strengthened, potentially making the cryptocurrency susceptible to Japanese market volatility. The ADP Employment report and ISM non-manufacturing data due for release later today could add to market volatility.