Crypto Market Shows Early Stabilization Signals in January

As of Jan. 21, the broader crypto market is showing early signs of stabilization following weeks of pressure. While price action remains range-bound across major assets, multiple indicators suggest selling intensity has eased. Indeed, a short-term balance is forming between buyers and sellers.

Bitcoin dominance is holding near 59.8%, stabilizing after its sharp decline from the 65% region earlier this month. Therefore, the inability to reclaim the previous dominance highs indicates that capital rotation out of Bitcoin has slowed but not fully reversed.

Importantly, dominance is no longer expanding aggressively, suggesting reduced defensive positioning from market participants.

Market Pressure Eases as Key Metrics Stabilize

The total crypto market cap is hovering around $3.0 trillion, following a pullback from the $4.1–$4.2 trillion peak zone. Moreover, the market is currently holding above the $2.8 trillion structural support, a level that repeatedly absorbed sell pressure since late 2025.

Similarly, volume declined compared to peak distribution phases, which could be a signal that forced selling is already exhausted. On the other hand, the ETH/BTC ratio remains compressed near 0.033 BTC, confirming that altcoin leadership is yet to be established.

Also, the stabilization narrative could be reinforced by using derivatives data. Indeed, total Bitcoin open interest sits near $60.5 billion, flat on a 24-hour basis, indicating leverage is not expanding aggressively in either direction.

Short-Term Direction Seeks Capital Flow

In the short term, the market could be positioned for a directional resolution. However, there are still no signs of full commitment.

Liquidation data over the past 24 hours shows approximately $280 million in total liquidations, split relatively evenly between long and short positions. Therefore, this balance could point to indecision but not a trend continuation.

For an upside continuation scenario, the market would need to see Bitcoin dominance capped below 61%. Also, analysts argue it would need to reclaim the $3.2 trillion level in total market capitalization.

On the downside, a failure to hold the $2.8 trillion market cap support might bring back systematic selling. Particularly if it’s joined by rising exchange inflows.

Today, exchange netflows for both Bitcoin and Ethereum remain slightly negative, suggesting holders are not rushing to distribute at current levels.

The Bigger Picture

From a broader perspective, the market appears to be transitioning into a more balanced phase.

Additionally, Bitcoin active addresses remain elevated on a long-term basis, even as short-term activity cools. Therefore, underlying network participation hasn’t suffered alongside price.

Fundamentally, the absence of panic-driven flows, neutral funding conditions, and flat open interest all point toward a market that absorbed prior excess.

As January advances, the crypto market is increasingly defined by patience. Moreover, directional clarity will depend on whether capital re-enters risk assets or remains defensive.

However, the data shows a market no longer dominated by forced selling or leverage stress.