Crypto prices retreat in return to downward U.S. trading day action

Market Overview - Bitcoin (BTC) experienced a brief rise towards $95,000 but has since retreated to just above $92,000, reflecting a 1.3% decline over the past 24 hours [1] - XRP, which initially led a crypto rally, fell over 2% in two hours, while Solana (SOL) also saw a similar decline after an initial boost from Morgan Stanley's spot SOL ETF offering [2] Stock and Commodity Performance - U.S. stocks showed modest gains with the Nasdaq up by 0.4% and the S&P 500 by 0.3%, while metals performed strongly, with gold rising 1% to over $4,500 per ounce and silver surging 5% above $80 per ounce [3] ETF Inflows - Bitcoin ETFs recorded their largest single-day inflow in nearly three months, amounting to approximately $697 million, indicating fresh institutional allocations and the unwinding of year-end tax-loss harvesting [4] - Ether (ETH) experienced a bullish flow with large block trades targeting mid- and long-dated upside via call spreads, suggesting strong directional conviction into the second half of 2026 [4] Options Market Sentiment - The options market reflects cautious optimism, with traders positioning for upside in both BTC and ETH, while BTC skew remains negative due to systematic overwriting and hedging from entities treating bitcoin as a treasury asset [5] - Risk-reversals, which involve buying calls while selling puts, are seen as a cost-efficient way to express upside views [5] Geopolitical Context - Bitcoin is increasingly viewed as a geopolitical hedge, less influenced by inflation or central banks, and more connected to statecraft and long-term strategic positioning [6] - Bitcoin's 6% loss in 2025 has been partially recovered in the first week of 2026, with historical patterns suggesting it has never posted back-to-back losing years [6] Historical Performance - Historically, after years of poor performance, crypto has rebounded sharply, as seen in 2014, 2018, and 2022, indicating that 2026 could potentially be a strong year for digital assets [7]