Bitcoin has soared to a one-month high since surpassing $94,000 on January 5, signaling a possible end to the stagnation that plagued the crypto market in the second half of 2025, and gaining momentum into 2026.
The rally signals a decisive shift in sentiment, given that flagship digital assets closed weakly last year while stocks hit record highs.
However, that trend appears to have reversed, with the first trading session of the new year seeing a modest but significant reversal.
During this period, Bitcoin has risen more than 3% since the beginning of the year, showing renewed vitality due to a combination of favorable macroeconomic conditions, a revival in institutional demand, and a cleaner derivatives market.
macro shift
Underpinning this nascent recovery is the changing macroeconomic landscape in the United States. Looking ahead to 2026, two trends are reshaping the investment landscape: a steepening yield curve and a structurally weaker dollar.
Analysts at Bitfinex said: crypto slate The US Treasury curve has decisively broken away from the inversion that characterized the 2022-2024 period.
This normalization is being driven by expectations that policy will eventually ease, coupled with rising long-term yields stemming from inflation uncertainty and fiscal concerns.
They further argued that this composition reflects repricing of duration and reliability risks rather than renewed growth optimism. In this environment, financial conditions remain tighter than the overall interest rate cut would suggest, creating a backdrop for liquidity to improve only selectively.
At the same time, the US dollar also depreciated significantly.
While the dollar’s structural fundamentals remain intact, supported by strong capital markets and demand for U.S. Treasuries, current currency weakness appears to be under control, reflecting policy preferences aimed at improving trade competitiveness.
The combination of a weaker dollar and higher long-term yields favors “real” or assets with defensive characteristics and short-term pricing power.
While Bitcoin is often seen as a hedge against fiat currency depreciation and liquidity expansion, it stands to directly benefit from this regime.
Bitcoin demand among institutional investors recovers
Beyond macro headwinds turning into tailwinds, the specific drivers of Bitcoin price movements are institutional in nature.
The pace of ETF-led selling, which slowed price movements late last year, slowed significantly toward the end of the year. The market is already seeing the effects as the liquidity situation improves in early 2026.
Bitcoin ETFs saw more than $1 billion in inflows in just the first two trading days of this year, according to data from Coinperps, indicating that institutional investors are returning to the asset class.
Meanwhile, this new demand is not limited to passive funds, as Bitcoin treasury companies are also accumulating BTC.
Charles Edwards, CEO of Capriol, said:
“Bitcoin treasury companies have just turned net long again… Institutional investors are net long Bitcoin again.”
In fact, the market has recently seen an increase in the number of BTC financial companies announcing new purchases.
For context, the largest corporate BTC holder, Strategy Inc. (formerly MicroStrategy), has strengthened its long-term commitment to the asset with another significant purchase, bringing its total holdings to 673,783 BTC.
At the same time, asset management company Strive announced that it had acquired 101.8 BTC in late December, bringing its total holdings to 7,626.8 BTC.
These acquisitions mark a significant turnaround from late last year, when activity at these companies slowed.
Market structure
Market structure data suggests this rally is built on a healthier foundation than the speculative frenzy of previous cycles.
Bitcoin’s rise above $94,000 was accompanied by a squeeze on short positions, but the broader derivatives environment remains “remarkably clean,” according to blockchain analytics platform CheckonChain.
Open interest in BTC futures has fallen from a peak of $98 billion in October to around $58 billion now, indicating that a major deleveraging event is already occurring.
Additionally, the annualized funding rate has hovered around 5.8%, consistent with the long-term median.
This neutrality suggests that the market is returning to a spot-driven regime, with price increases being driven by real demand rather than excessive leverage.
Internally, massive supply redistribution supports the bullish theory. Data from blockchain intelligence firm Santiment shows a “very bullish” divergence in market behavior. While “whales” are actively saving, smaller retail wallets are retreating.
Since December 17th, large stakeholders, especially those holding between 10 and 10,000 Bitcoin, have added a total of 56,227 BTC to their balances. Santiment points out that this accumulation marked a local bottom in assets.
Importantly, this buying pressure from large companies is occurring while retail traders remain skeptical. In the past 24 hours, wallets holding less than 0.01 BTC have started taking profits, seemingly expecting the current price trend to be a “bull’s trap” or a “rally of fools.”
The market typically moves in the opposite direction of small retailers’ wallets, Santiment said. The combination of whale accumulation and retail dumping creates a situation the company characterizes as “very bullish” as the coin moves from weak hands to long-term holders.
Furthermore, James Cote, Principal Crypto Analyst at Real Vision, highlighted the technological collaboration that underpins this movement.
“Finally, we’re seeing a proper bullish correction and not just one indicator firing,” Cote said, pointing to the Dec. 31 Demark 13 exhaustion signal and a bullish reversal in the “trend chameleon” indicator.
He noted that this particular liquidity regime has historically delivered a median 180-day return of nearly 26% with a high win rate.
The road to 6 digits
Considering these developments, BTC traders are already betting that the rally will extend far beyond current levels.
Since January 2nd, Deribit has seen a spike in interest in call options expiring in January with a strike price of $100,000.
Jake Ostrovskis, head of Wintermute OTC, observed that call buying is dominating desk flow and that the “aggressive put premium” is finally fading.
Data from CryptoQuant analyst Darkfost supports this bullish outlook.
The analyst noted that the Bitcoin-to-stablecoin ratio on Binance, a key metric for assessing potential purchasing power, is hovering around levels last seen during the March 2025 correction. Notably, this was just before Bitcoin rose to an all-time high of around $126,000.
He also pointed out that the stablecoin’s reserves have recently increased by about $1 billion, indicating that a filled “dry powder” barrel is ready for deployment.
According to him:
“This change could signal the early stages of a gradual rollout of liquidity, which would be a very positive signal for the market.”
While some caution remains, the immediate settings suggest higher prices.
The path of least resistance appears to be moving even higher as Bitcoin regains systemic levels and selling pressure from the US session eases. If the cryptocurrency maintains its momentum above $94,000, the psychological $100,000 barrier could be the next domino to fall.