Crypto Markets in Aversion: Bitcoin Brakes as Gold Shines and Altcoins Look for a Way Out

The week ends with a decidedly risk-off sentiment in global financial markets, and the cryptocurrency sector fully reflects investors’ aversion. As traders seek refuge in defensive assets such as gold and silver, bitcoin struggles to maintain previous levels and altcoins show mixed signs of recovery in an environment of limited liquidity.

When Risk-Off Dominates: Performance of BTC, ETH and Precious Metals

Bitcoin has fluctuated around $84,460, registering a 6.61% decline in the last 24 hours from midnight UTC. Ethereum came under even greater pressure, falling to $2,830 with a loss of 6.39%, reflecting broader sentiment that is also affecting traditional stock markets. Nasdaq 100 and S&P 500 futures showed the same weakness, consolidating the coordinated movement towards safer assets.

Gold and silver have extended their runs to record levels, acting as a thermometer of the prevailing risk aversion in the markets. The positive signs for these precious metals come directly from the tense geopolitical climate: the trilateral talks between Ukraine, Russia and the United States have generated an atmosphere of uncertainty, pushing investors towards defensive strategies. In such scenarios, traders’ aversion to high-risk assets is tangibly manifested through the influx into traditional safe-haven assets.

Altcoins Between Scarce Liquidity and Rebound Hopes

Despite the unfavorable environment, the altcoin sector showed weak positive signs. LayerZero (ZRO) has seen a change of -1.75% in the last 24 hours, while it had previously been supported by expectations for an update expected in early February. Tron (TRX) and Dash (DASH) came under even more pressure, falling 0.63% and 7.29%, respectively.

However, the altcoin season indicator has improved slightly, moving from 24/100 to 29/100, suggesting that some traders are attempting to take advantage of the quiet market to position themselves on smaller-cap projects. The CoinDesk 20 Index (CD20), which measures the performance of major altcoins, lost about 0.6%, while subsets related to DeFi, metaverse tokens, and memecoins made progress. This contrast highlights a more risk-conscious selection among different segments of the crypto market.

Liquidity scarcity continues to negatively characterize the altcoin market. For example, The Open Network (TON), which is listed at $1.46, has a 2% market depth of between $580,000 and $700,000. An order of this size would be enough to significantly move an asset with a market capitalization of $3.7 billion. This shortage of order books means that any rebounds in the broader market could artificially inflate altcoins’ gains, given the absence of a selling counterparty.

Derivatives and Sentiment: Traders’ Crowded Positioning

Over $200 million in crypto futures positions were liquidated in the last 24 hours, with bullish (long) bets accounting for the majority of the total liquidated. This pattern has persisted since the beginning of the week, as the declines surprised speculatively positioned traders.

Bitcoin’s 30-day annualized implied volatility index (BVIV) fell again to 40%, reversing a brief increase on Tuesday that had reached 44%. This decline signals a persistent interest of investors in selling volatility through defensive strategies such as covered calls. Ethereum remains the only one among the top 10 tokens to have seen an increase in futures open interest in the past 24 hours, while Bitcoin, XRP, Solana, and others have seen capital outflows from their derivatives markets.

On Deribit, an exchange specializing in derivatives, short-term put options on Ethereum are more expensive than those on Bitcoin, indicating a more bearish sentiment towards Ethereum’s native token. Block trading flows, meanwhile, showed a preference for straddles on Bitcoin (a bet on volatility) and put spreads on Ethereum, reflecting caution from institutional traders.

XRP in Trouble and the Metaverse in Evidence: Sector Breakdowns

Ripple (XRP) fell by 5.56%, falling from $1.91 to $1.82, an accelerated decline when the token broke critical support around $1.87 with high volume. The bulls have intervened in the $1.78–1.80 zone, an area that traders now consider a crucial support level. A sustained break above 1.87–1.90 would be necessary to signal a corrective rebound rather than the start of a deeper decline. This XRP case exemplifies the behavior of high-beta tokens in risk-off environments, where capital outflows are concentrated on more speculative assets.

In contrast, the metaverse sector continues to be the best performer of the year, with the CoinDesk Metaverse Select Index (MTVS) posting a 50% gain as of Jan. 1. Axie Infinity (AXS), listed at $2.16, and The Sandbox (SAND), at $0.11, led these gains. Pudgy Penguins emerges as one of the strongest NFT-related brands of this market cycle, transforming from speculative “digital luxury goods” into a multi-vertical consumer IP platform. The ecosystem’s strategy involves acquiring users through mainstream channels (toys, retail partnerships, viral media) and then onboarding them into Web3 via games, NFTs, and the PENGU token. The ecosystem now spans phygital products (over $13 million in retail sales and more than 1 million units sold), games and experiences (Pudgy Party surpassed 500,000 downloads in two weeks), and a widely distributed token (airdrop to over 6 million wallets). While the market currently values Pudgy Penguins at a premium over traditional IP competitors, sustained success will depend on execution in retail expansion, gaming adoption, and deepening the token’s utility.

The dichotomy between the collapse of high-beta tokens and the resilience of the metaverse sector underscores how risk aversion is not uniform: some segments of the market, those linked to infrastructure or experiential growth narratives, continue to find support among contrarian and long-term investors.