The Pullback Test

DAILY MARKET OVERVIEW

Testing Conviction

👋 Hey, Crypto Enthusiasts! Some significant events went down so let’s quickly dive in!

After rejecting resistance near $95,000, Bitcoin has pulled back modestly, yet continues to hold above $90,000, a level that remains technically and psychologically important.

While the recent ETF inflow streak stalled, with roughly $200 million in net BTC outflows yesterday, an important development emerged that helped stabilize sentiment briefly.

🔑 MSCI Delivers a Key Update

MSCI, the firm behind many of the world’s most widely followed equity indexes, announced that it will not remove digital-asset-heavy companies like Strategy from its indexes for now.

The market reaction was immediate. Strategy stock jumped as investors digested what this meant. Had Strategy been removed, passive index funds would have been forced to sell shares automatically.

That said, the decision cuts both ways:

• Positive: MSCI will not trigger forced selling by index funds

• Caution: MSCI also will not include newly issued shares in its indexes

This means the stock is less exposed to sudden downside pressure, but it also loses a source of automatic demand going forward. Stability improves, but upside momentum from passive flows is capped.

⚠️ Macro Risk on the Horizon

Another major catalyst could arrive as soon as Friday. The US Supreme Court is expected to rule on the legality of Trump era tariffs. If the court finds them illegal, billions of dollars in collected tariffs could be subject to repayment.

According to Polymarket, there is currently about a 21% that the court rules in favor of the tariffs remaining intact.

If the tariffs are deemed illegal, we would expect an initial risk-on reaction across crypto, followed by a period of reassessment as markets digest the broader economic implications.

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SOCIAL SENTIMENT

Holding the Line

With geopolitical tensions continuing to build, traders remain cautious and highly reactive. So far, crypto markets are handling the pressure well.

• As long as Bitcoin holds above $90,000, a path toward a $100,000 retest remains open.

• Ethereum looks even stronger on the higher time frame, where an inverse head and shoulders structure is developing. If confirmed, this pattern could eventually open the door to new all-time highs for ETH.

Outside of BTC and ETH, most altcoins are still carving out longer-term bearish structures. These typically take time to resolve.

We may continue to see short-term relief rallies, like we did with meme coins, but for now we do not believe a sustained, full-scale bull trend has returned.

Our approach remains patient and deliberate. No chasing. No FOMO. We are waiting for cleaner setups and deeper pullbacks before committing more capital.

NEWS OVERVIEW

The Latest Crypto Headlines 📰 

Ethereum Activates BPO2 Fork to Ease Rollup Congestion 
The network's latest "parametric" update has successfully boosted data capacity per block, providing much-needed headroom for Layer 2 scaling as transaction counts hit record highs.

Morgan Stanley Files for Spot Ethereum ETF with Staking 
Following its Bitcoin and Solana moves, the $6.4T wealth giant is now targeting Ethereum, proposing a fund that captures staking rewards to boost long-term investor value.

Bankers Warn Stablecoin Workarounds Threaten $6.6T in Deposits 
Community banks are urging the Senate to close a loophole in the GENIUS Act, claiming crypto firms are using affiliate "rewards" to lure savings away from local lending.

Ripple Shuns IPO in Favor of $40B Private Strategy 
President Monica Long confirmed Ripple will remain private, citing a "healthy" balance sheet and a $500M war chest that allows the firm to grow through acquisitions without public market pressure.

YOUTUBE INFLUENCER SUMMARY

Summary From The Top Influencers 📷️ 

Benjamin Cowen – Ethereum: Dubious Speculation (07.01.2026 Summary)

In this video, Benjamin Cowen explains why Ethereum’s early-2026 price action looks more like the 2019 post-bear-market phase than the start of a new bull run.

Key points

• In 2019, after peaking in 2018, Ethereum saw several relief rallies that failed at resistance, slowly trending lower without market euphoria.

• Cowen argues today’s setup is similar: Ethereum is bouncing, but sentiment remains muted and conviction is weak.

• The bull market support band is currently around $3,400–$3,700 and is acting as a key resistance zone.

• The next one to two months are critical; failure to reclaim this range likely leads to a gradual decline through 2026.

• Weakness in the ETH/BTC ratio limits the odds of sustained upside in USD terms.

Brief takeaway

Cowen’s view is that Ethereum may be repeating the 2019 pattern: convincing rallies that fade, followed by better long-term opportunities later rather than immediate new highs.

Paul Barron Network – Japan's Multi-BILLION $ Crypto Master Plan in 2026! (07.01.2025 Summary)

This video argues that Japan is positioning itself as a global leader in crypto adoption in 2026, driven not by retail hype but by government support and large corporations integrating blockchain into everyday products.

Key points

• Japan’s crypto strategy is top-down and enterprise-led, with firms like Sony, Honda, and banks embedding blockchain in consumer products.

• Sony and Honda are building crypto-enabled, token-incentivized in-car platforms, signaling real-world use beyond speculation.

• A yen-backed stablecoin is expected to launch in mid-2026, alongside progress in tokenized stocks.

• Japan’s push is tied to long-term economic challenges, using tokenization and digital assets as tools to restart growth.

• Gaming and digital collectibles are framed as the main adoption gateway, with blockchain operating quietly in the background.

Brief takeaway

The core message is that Japan isn’t chasing hype. It’s laying regulatory and corporate groundwork so crypto shows up as normal infrastructure in 2026, not as a speculative trend.

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