How Low Can Stocks & Crypto Go? January 26th, 2026
Trade, Congress and Earnings are in focus entering this week...
Bottom Line: My first rule of money... Never let your money and emotions cross paths. This story is a weekly wake-up call to show you the near-worst-case scenario for stocks and crypto. Why? So, you can plan your financial future with a cool head, not a racing pulse. The odds of a near-worst case outcome almost certainly won’t happen, however if your plan accounts for it – it can help you manage even the most trying markets like what we’ve experienced this year.
The US stock market is history’s ultimate wealth-building beast. Crypto? It’s minted millionaires from early believers. Fact: Over 90% of the time, investors who try to “time” the market end up poorer than if they just stuck to their original investments. This is about dodging that trap.
Here’s how the big three indexes have fared in 2026:
- DOW: +1.5% (slightly lower last week)
- S&P 500: +1% (slightly lower last week)
- Nasdaq: +1.1% (slightly lower last week)
It was a short and wild week of trading that led to stocks finishing the nearly unchanged but slightly lower for a second straight week. Initial concerns about a potential trade war with Europe over Greenland abated following the news that a “framework for a deal” had been established for U.S. interest in Greenland between NATO and President Trump. After performing well in the previous week, digital currencies sold off erasing most gains for the year in the process. That wasn’t the case for precious metals as gold and silver continued to post record high prices as gold is over $5,000 an ounce, and silver is now over $110 for the first time.
The positivity continued as the House of Representatives passed the final funding bills for the federal government for the current fiscal year – leading to what appeared to be a drama free end to the process, however that’s no longer the case. Over the weekend, following the ICE involved killing of an armed ICE protestor in Minneapolis, Senate Minority Leader Chuck Shumer said he’ll no longer support the funding bill for the Department of Homeland Security which includes ICE funding. This has raised questions about whether there will be a partial government shutdown at the end of this week as Friday’s deadline for funding that’s yet to be approved.
Otherwise, earnings continue to come in stronger than expected. As of Friday, for the 13% of companies that have reported, they’ve paced 8.2% growth year-over-year.
Now for valuation calculations – starting with cryptos...Here’s a look at where they stand.
- Bitcoin: flat in 2026 (-5% last week)
- Ether: -2% in 2026 (-7% last week)
- BitwiseETF (Top 10 cryptos): -2% in 2026 (-8% last week)
I can’t value cryptos because they have no inherent value. Stocks, though? They’ve got bones. Let’s break down the S&P 500:
- Current P/E: 31.23
- Historic Avg. P/E: 16.19
Translation: On earnings alone, the maximum downside risk is a 48% drop from here—slightly lower than similar to a week ago as stock prices were mostly flat and fundamentals slightly improved. The market is historically expensive as it’s priced near the highest multiple of the current bull market cycle.
So, What’s Your Move?
If a 48% dip wouldn’t derail your life, you’re probably golden. If it would? Time to call a pro and build a plan that doesn’t leave you sweating bullets—or making mistakes.