Weekly Crypto and NFT Market Recap (6 Jan – 12 Jan)

Welcome to our latest weekly crypto and NFT market roundup. This week saw some seriously contrasting signals from potential large-scale Bitcoin auctions by the US government, to NFT sector shake-ups involving leading collections. Whether you trade major tokens or keep an eye on niche projects, staying informed helps you navigate ongoing volatility, regulatory rumblings, and evolving trends across digital assets.

Big Bitcoin Dump Coming: Should Traders Worry?

Really big dumps are in the news again, and not just because of a certain scatterbrained orange felon set to once again take the wheel in the US. The Department of Justice has finally been given the green light to sell off a chunk of BTC, valued at roughly $6.5 billion. This chunk forms part of the nation’s broader government stash of over 198,000 BTC, seized primarily from the Silk Road bust and earlier crackdowns. While the sheer scale of these assets initially concerned traders, past auctions suggest these events rarely produce lasting downward pressure on crypto prices.

Historically, such auctions have been relatively transparent and tend not to dump tokens on open exchanges, thereby reducing sudden liquidity shocks. Instead, the U.S. Marshals Service typically organizes public bidding, giving institutional buyers and over-the-counter desks an orderly route to purchase large volumes without spooking the market. Although short-lived price dips can occur as headlines generate uncertainty, many analysts predict minimal disruption in the long run.

There is some speculation that the Biden administration aims to offload this BTC before Donald Trump’s inauguration. Trump has signaled a desire to bring Bitcoin under the US strategic reserve shortly, an unprecedented stance. Observers warn that these political motives may override financial logic, with the government letting go of tokens that could command a higher price later—particularly if renewed institutional or regulatory tailwinds spark a fresh BTC bull run.

In reaction to this news, Bitcoin shaved off roughly 2–3% of its value, closing around the mid-$90,000s by midweek. Yet that shift aligns with the broader dip tied to uncertain market sentiment, not necessarily the impending sell-off. In previous auctions, the crypto market has shown resilience, often recovering quickly as demand for top-tier assets remains strong. Consequently, while the government’s sell-off might trigger intermittent volatility, most analysts and on-chain data platforms see no fundamental reason for a major BTC correction.

Crypto Prices Bounce: Key Levels for BTC, ETH, and Altcoins

Despite the looming threat of government Bitcoin sales, the wider crypto market showed mixed fortunes this week, characterized by brief sell-offs and ensuing minor rebounds. Bitcoin tested support near $95,000, dipping below its 50-day moving average on Jan. 10 before bouncing back slightly. Analysts point to stable inflows into spot Bitcoin exchange-traded funds—a sign that many long-term investors remain unfazed by short-term price action.

Ether encountered its own struggles, dropping beneath an ascending triangle pattern established earlier in the month. The move invited bearish forecasts, but Ether managed to defend the critical $3,000–$3,100 zone. Bulls maintain that if the upcoming Pectra update to Ethereum’s network proceeds smoothly, ETH could challenge the $3,700–$3,800 zone yet again. Higher volume buy-ins would be necessary to confirm a renewed uptrend, especially amid rising competition from newer layer-1s.

Meanwhile, a handful of altcoins outperformed expectations, propelled by strong developer activity and decent liquidity conditions. Solana re-tested support at the uptrend line near $175, searching for a catalyst to rekindle the momentum that had run out of steam last month. Memecoins like Dogecoin and Pepe, however, saw more notable volatility, with occasional intraday price swings exceeding 10%. Traders who prefer scalp or swing trading found ample opportunities in these riskier segments.

Cardano and Avalanche each retraced from key resistance levels, with both projects facing questions around the speed of their respective rollouts and the real-world usage of their tokens. Some see these dips as chances to accumulate quality assets at a discount, assuming the broader bull market continues. Others remain more cautious, waiting for a clearer technical breakout before committing capital.

PENGU Rally Defies Collection Sales Slump

Pudgy Penguins found itself in the spotlight once again as its native token, PENGU, rose by 13% on Jan. 5, defying a broader dip in the project’s NFT sales. According to CoinGecko, PENGU has soared 250% since its launch on Dec. 17, although its market capitalization slipped from $2.8 billion at debut to around $2.5 billion. Blockchain analytics platform Lookonchain noted certain large holders withdrawing significant token amounts—worth millions of dollars—suggesting that some are cashing out profits while momentum remains strong.

Despite the token’s rally, data from CryptoSlam showed Pudgy Penguins’ NFT sales dropping to just over $1m during the last seven days. In parallel, the number of buyers and sellers declined by over 40% compared to the previous week, underscoring the diverging performance between the collection’s NFTs and its token. Some point to the project’s viral GIF and sticker campaigns as the main driver behind PENGU’s token interest, which surpassed direct NFT sales.

In addition to the usual NFT marketplace activity on Ethereum, Pudgy Penguins has partnered with major retailers Walmart and Target to distribute licensed toys, leading to over one million units sold. This offline presence may have steered mainstream attention toward the token, particularly as PENGU is set to expand beyond Solana, aiming for compatibility with Ethereum and Abstract, an Ethereum layer-2 solution by Igloo Inc. Rumors also circulate about a potential airdrop for PENGU holders involving Abstract tokens, fueling speculative buys.

For now, the mismatch between token hype and declining NFT sales highlights the complexity of NFT ecosystems. Speculators find it easier to buy into an ERC-20 or SPL token compared to navigating NFT marketplaces with higher fees or complicated listing procedures. Observers will watch whether Pudgy Penguins can translate short-term token success into revived NFT demand, or if continued negative trends in NFT sales eventually weigh on PENGU’s price action.

Final Thoughts

Despite short-term dips and diverse performance patterns, the crypto and NFT markets continue to offer active traders ample opportunities. The US government’s potential Bitcoin auction, altcoin support tests, and NFT token divergences all highlight a market in flux but far from stagnant. Going forward, prudent research and risk management remain essential as the industry navigates a dynamic and ever-evolving landscape.