January’s “fake rally” ended with Bitcoin losing its $84k floor as smart money sold into ETF euphoria, rebuilt stablecoin war chests, and shifted to defensive accumulation, according to a new monthly report published by Finestel.
Summary
- Finestel says tourists chased “Trump QE” ETF flows as BTC spiked toward $98k, before Fed and Iran shocks sent Bitcoin crashing while gold hit new highs.
- BTC’s close near $77,195 trapped ~1.2m coins at a loss, while ETH broke $2,900 support, saw a 26% January drop, and on-chain realized losses topped $400m per day.
- Pro desks raised stablecoin allocations from ~5% to 28% and now favor a 55% BTC, 35% stables mix, treating $75k–$77k as support and $84k as the line to re-risk.
According to a new monthly report published by Finestel, January’s “great decoupling” was brutal, but it was not blind chaos. It was a month in which retail chased the “digital gold” myth while smart money quietly sold into them and raised cash at the top.
From Trump QE euphoria to Warsh shock
The year opened with what Finestel calls a “fake rally,” as roughly $1.42 billion rushed into U.S. spot Bitcoin ETFs on the back of “Trump QE” hopes and easy-money fantasies. “This was just tourists chasing a trend, not believers,” the report notes, as BTC ripped back toward $90,000 and briefly tested $98,000. Then came the double hit: Kevin Warsh emerging as Fed Chair favorite and rapidly escalating Iran tensions, which flipped the tape from risk-on to full risk-off almost overnight. Gold powered to fresh highs above $5,500 while Bitcoin “acted like a risky tech stock and crashed,” shattering the digital gold story for now.
Broken floors and forced sellers
Technically, the key event was the loss of the long‑defended $84,000 floor in Bitcoin. By month-end, BTC closed near $77,195, effectively trapping about 1.2 million coins at an unrealized loss and turning that supply into heavy overhead resistance. “We are no longer in a ‘buy the dip’ environment; until proven otherwise, we have entered a ‘sell the rip’ structure,” Finestel warns. Ethereum fared worse, ending January down 26% as the ETH/BTC ratio slid to multi‑year lows and the $2,900 support gave way, opening “the door to lower prices around $2,200” despite a $104 million ETH buy from Bitmine that the market simply faded. On‑chain, the reset was violent: short‑term holders were dumping at roughly $400 million in daily realized losses, while Jan. 31 alone saw $2.53 billion in liquidations, 88% from longs.
Smart money’s defensive rotation
Against this backdrop, Finestel’s asset‑manager data show professionals were not caught flat‑footed. “While the broader market chased the $95,000 breakout, professional desks on Finestel were already executing a quiet exit,” the report states. Stablecoin balances that had been run down to 5.2% in early January were methodically rebuilt, climbing to 18.5% as ETF inflows peaked and then to 28.4% by the time the late‑month liquidation cascade hit. “This wasn’t luck; it was a disciplined execution of ‘selling the rip,’” Finestel writes, arguing that January “transferred wealth from weak ETF hands to strong corporate balance sheets.”
Policy tailwinds beneath the pain
Ironically, January’s price carnage arrived as the regulatory backdrop turned more constructive. In Washington, the White House signaled support for a “Bitcoin Strategic Reserve,” indicating it plans to stop dumping seized BTC and instead hold it as a strategic asset. Japan moved to cut crypto investor taxes toward 20%, while South Korea lifted its ban on corporate crypto investing and layered in stronger consumer protections, steps Clifford Chance described as part of a broader “global crypto regulatory maturation” through January. Even privacy assets caught a bid, with softer rhetoric around privacy coins helping tokens like NIGHT “perform better than the rest of the market” despite the broader drawdown.
February: defensive accumulation, not hero trades
With leverage flushed and “tourists” blown out, Finestel’s playbook for February is deliberately dull: “Defensive Accumulation.” Top managers favor keeping roughly 55% in Bitcoin, 35% in cash‑like stablecoins, and a small residual for selective altcoin exposure, treating the $75,000–$77,000 band as the institutional line in the sand and $84,000 as the trigger to re‑risk. “The bottom is a process, not a single moment,” they argue, advising investors to “stay liquid, stay patient, and let the price come to you.”
Meanwhile, spot action reflects that bruised but functioning market. Bitcoin (BTC) trades near $70,746, with a 24‑hour range between roughly $60,256 and $71,604 and about $132.2B in volume. Ethereum (ETH) changes hands close to $2,062, with 24‑hour turnover over $64.1B and intraday prints between roughly $1,756 and $2,085. Solana (SOL) sits around $86, essentially flat on the day after a 35% monthly drawdown and a seven‑day range of roughly $75.76–$104.98 as derivatives activity and open interest grind lower.
