BTC Enters 2026 With Quiet Strength

GM Anon!

The new year opens with BTC still locked in its broader range. Price managed to push through $90K briefly, but that attempt has faded and we are now trading just back below that area. The move above resistance was more of a test than a clean regime change. For now, $90K is acting as the upper boundary of a band rather than a level that has been convincingly reclaimed.

What stands out is the contrast between the tape and the underlying behavior. Even with that push, sentiment has not meaningfully improved. Most participants still read the move as a rally inside a larger range rather than the start of a new leg. Headlines remain cautious, ETF investors have not returned in size, and there is little evidence of aggressive retail chase. Beneath that, long term holders, whales and patient capital continue to quietly add, using the back and forth around $90K as an opportunity rather than a signal that the cycle is over.

Where BTC Currently Stands

On shorter time frames, the picture is still that of a market testing the top of its range rather than breaking out cleanly. The four hour chart managed to push through the moving average band that had been capping price, but that improvement has faded a little and BTC has slipped back under the top of the range. Instead of turning that area into firm support, the market is treating it as a level to probe and reject. For now, it remains the reference point for sellers rather than a confirmed base for the next leg.

Sentiment has not changed much, and that is not necessarily a negative. The tone across social channels, traditional media and ETF flows is still cautious. Most people see this as back and forth inside a band, not as the beginning of a trend. There is very little evidence of fear of missing out or aggressive chasing. If the structure does eventually improve and acceptance builds higher in the range, that wall of skepticism can become useful fuel rather than a headwind.

ETFs And Positioning

The ETF side of the market has not turned yet. Recent data show BTC products with sizeable net outflows in the hundreds of millions of dollars and ETH funds seeing smaller, but still negative flows. Some of the flagship funds have booked outflows in the majority of the past ten weeks. Assets under management are down roughly a third from the peak and have returned to levels last seen around mid 2025. Crypto funds more broadly saw meaningful weekly outflows.

The message is straightforward. The more conservative, benchmark driven money is still in de-risk mode. It is not capitulating in a panic, but it is not adding either. From the point of view of market structure, ETFs are still a headwind. They are not yet providing the strong, persistent bid that helped support previous advances. When this side of the market stabilises and then starts to print consistent inflows again, it will be an important confirmation that the risk appetite of larger pools of capital has turned.

Derivatives, Liquidity And Market Tone

Derivatives, by contrast, look like the early stages of rebuilding rather than a late stage blow off. Open interest has been ticking higher alongside price, but not in a way that looks overstretched. The market is adding leverage, but in a measured fashion.

Funding is near flat to slightly negative, which tells you that longs are not being forced to pay up aggressively to hold positions. There is no obvious sign of crowded leverage or one sided positioning that needs to be washed out immediately.

Calm derivatives markets combined with a slow grind higher is typically a healthier way to start a new phase than a straight line impulse. It allows risk to be rebuilt without immediately pushing the system into instability.

On-Chain Behaviour And Risk Profile

On-chain data still carries the scars of the previous drawdown. Long term holder realized losses have been rising, which means some older coins have been sold at a loss, a sign of fatigue and capitulation on the margin.

Measures of the percentage of supply in profit are sitting near zones that have historically corresponded to cycle transition points. Risk indices point toward a late stage consolidation environment, but not a confirmed trend reversal yet. At the same time, long term holder cohorts have flipped back into net accumulation over the past month. Part of that is older holdings maturing into the long term bracket.

Furthermore, the Sharpe ratio for BTC over the past year has turned negative, which means that investors have been paid poorly for the volatility they carried, a typical late cycle pattern in consolidations.

Lastly, price remains inside its two year valuation band. Structurally, that is a market that has digested a lot, but has not yet made its next major decision.

Taken together, on-chain indicates that smart money is buying boredom and uncertainty, but not yet fully chasing either.

New Fed Chair, Politics and the Liquidity Path

The policy backdrop is shifting in a way that increasingly leans supportive for digital assets.

With a new Federal Reserve chair soon stepping in under a White House that clearly prefers easier financial conditions, the bias over the next stretch looks tilted toward accommodation rather than restraint. We still need to learn the new chair’s style and how they communicate around inflation, but the political alignment matters. A Fed leadership team backed by an administration that openly favors growth and markets is unlikely to fight easing for long.

Rate cuts remain uncertain in timing and size, yet the direction of travel looks clearer than it did months ago. Inflation has cooled, growth is uneven, and the broader system is being nudged toward relief. That makes it increasingly difficult to imagine a scenario where policy stays tight through 2026.

At the same time, global liquidity continues to expand. Balance sheets are gently growing, repo usage is active, money supply is pressing higher, and the dollar’s broader tone is softer. Historically, environments like this tend to lift financial assets that benefit from scarcity and narrative, rather than hurt them.

Put simply, 2026 is likely to shape up as a period where easier policy, rising liquidity, and a friendlier macro backdrop gradually come together. It will not remove volatility. But it sets the stage for assets like BTC to operate with the wind at their back rather than in their face.

What To Expect In The Near Term

In the immediate future, BTC still has work to do. Holding above $90K is the first test. Building real acceptance above that level and slowly turning it into a reliable area of support would confirm that the market has moved out of the prior compression. From there, the next questions become how ETF flows evolve, whether derivatives continue to rebuild in a measured way, and whether spot demand stays resilient into any pullbacks.

The base case is not that everything suddenly accelerates. The base case is that BTC spends time proving this range out, shaking out weak conviction on both sides, and giving larger capital time to re-position around a changing macro regime. Short-term volatility will be driven by flows around key levels and the ongoing tug of war between de-risking in some channels and accumulation in others.