Bitcoin has stormed into 2026, rising to its highest level in over a month after rising above $94,000 on January 5, signaling a possible end to the stagnation that plagued the crypto market in late 2025. This rally marks a crucial shift in sentiment, considering the flagship digital stock ended the previous year with a whimper while shares hit record highs. However, this trend appears to be reversing as the first trading sessions of the new year saw a modest but significant reversal.
During this period, Bitcoin is up over 3% year-to-date, showing renewed momentum driven by a confluence of favorable macroeconomic conditions, revitalizing institutional demand and a cleaner derivatives market. Behind this nascent recovery is a changing macroeconomic landscape in the United States. Heading into 2026, two amplifying trends are shaping the investment climate: a steeper yield curve and a structurally weaker dollar.
The Macro Change
Analysts at Bitfinex told CryptoSlate that the US Treasury curve has moved significantly out of the inverted state that characterized the 2022-2024 period. This normalization is being driven by expectations of eventual policy easing at the front end as well as increased long-term yields due to inflation uncertainty and fiscal concerns. They further argued that this configuration reflects a reassessment of duration and credibility risk rather than renewed growth optimism.
In this environment, financing conditions remain tighter than the general interest rate cuts suggest, creating a backdrop in which liquidity improves only selectively. At the same time, the US dollar has weakened significantly. While the greenback’s structural fundamentals remain intact – supported by deep capital markets and demand for government bonds – the current depreciation appears to be controlled, reflecting policy preferences for improved trade competitiveness.
Institutional Appetite for Bitcoin is Returning
Apart from macro headwinds turning into tailwinds, the specific drivers of Bitcoin price action are increasingly institutional in nature. The pace of ETF-driven selling, which dampened price action late last year, slowed significantly as the year ended. As liquidity conditions improve in early 2026, the market is already feeling the impact. In the first two trading days of the year alone, data from Coinperps shows that Bitcoin ETFs saw inflows of over $1 billion, suggesting that institutional capital is flowing back into the asset class.
Meanwhile, this renewed demand is not just limited to passive funds, as Bitcoin financing firms are also accumulating BTC. Charles Edwards, the CEO of Capriole, noted: “Bitcoin financial firms have just switched back to net buying… Institutions are once again net buyers of Bitcoin.” In fact, the market has recently seen more and more BTC financing companies announcing new purchases.
Market Mechanics
Market structure data suggests that this rally is built on healthier foundations than the speculative enthusiasm of previous cycles. According to blockchain analytics platform Checkonchain, Bitcoin’s rise above $94,000 was accompanied by pressure on short positions, yet the broader derivatives landscape remains “surprisingly clean.” Open interest in BTC futures has plummeted from a high of $98 billion in October to about $58 billion today, suggesting massive deleveraging has already occurred.
Annual financing rates are around 5.8%, which is in line with the long-term median. This neutrality suggests that the market has returned to a spot-driven regime, where price increases are fueled by real demand rather than excessive leverage. Under the hood, a massive supply redistribution confirms the bullish thesis. Data from blockchain intelligence firm Santiment shows a “very bullish” divergence in market behavior: “whales” are accumulating aggressively while small retail wallets are exiting.
The Way to Six Digits
Given these developments, BTC traders are already expecting the rally to extend well beyond current levels. Since January 2, interest in call options expiring in January with a strike price of $100,000 has increased on Deribit. Jake Ostrovskis, head of Wintermute OTC, noted that call buying is dominating desk flow and the “aggressive put premium” is finally easing. Data from CryptoQuant analyst Darkfost supports this optimistic outlook.
The analyst noted that the Bitcoin-to-stablecoin ratio on Binance – a key metric for assessing potential purchasing power – is hovering near levels last seen during the March 2025 correction. This notably happened just before Bitcoin began a rally to its all-time high of around $126,000. He also noted that stablecoin reserves have recently increased by around $1 billion, suggesting that a loaded “dry powder” barrel is ready for deployment.
Although caution is still advised, immediate developments point to higher prices. As Bitcoin returns to systematic levels and selling pressure eases during the US session, the path of least resistance appears to be higher. If the cryptocurrency can maintain its momentum above $94,000, the psychological barrier of $100,000 could be the next domino to fall. For more information, please visit https://cryptoslate.com/bitcoin-whales-added-56227-btc-while-tiny-wallets-sold-and-this-pattern-usually-ends-one-way/
