Bitcoin and the broader cryptocurrency market have kicked off 2026 with notable momentum, thanks to a blend of new-year allocations, safe-haven bids, and fading pressures from tax-related selling. Bitcoin recently traded around $93,700, reflecting a 1% increase over the past 24 hours and a substantial 7% rise since the beginning of the year. Meanwhile, Ether saw a nearly 2% increase to $3,224 and is up about 9% in the same timeframe. XRP led the large caps with a remarkable nearly 13% spike in one day to $2.40, reflecting almost a 29% increase over the week. Other cryptocurrencies, such as Solana and Dogecoin, also reported significant gains of 12% and 23%, respectively.
This positive shift in cryptocurrency prices follows a sluggish period in late December, characterized by tax-related selling and year-end cleanups that capped upside potential, particularly during U.S. trading hours. Many U.S. investors liquidated crypto holdings at a loss to mitigate tax liabilities. As that pressure subsided, a rebound began, as noted by analysts from Singapore-based QCP Capital. They emphasized that the connection between cryptocurrency and broader risk assets seems increasingly indicative of a regime shift, buoyed by the fading of year-end tax loss harvesting and renewed policy options.
Bitcoin’s price ascent correlates with a positive sentiment on Wall Street. Recent geopolitical events, including U.S. military actions in Venezuela, have driven stock markets higher, particularly boosting oil shares and technology stocks—domains closely aligned with cryptocurrency trends.
The U.S. strike on Venezuela has likely contributed to a safe-haven bid for assets like Bitcoin, akin to traditional safe-haven assets such as gold. Analysts suggest that the military action may lead to increased Venezuelan oil supply under U.S. guidance, which could lower oil prices and generate disinflation—further encouraging favorable conditions for cryptocurrencies. Additionally, there is market speculation around Venezuela’s potential possession of significant “shadow” Bitcoin reserves, though these claims remain unverified.
Another essential factor influencing the market is the launch of U.S.-listed spot exchange-traded funds (ETFs) in 2026, which have already seen substantial inflows. This surge indicates a reversal of a two-month de-risking trend wherein institutions withdrew billions, contributing to past declines in Bitcoin and the wider cryptocurrency market. Over just the first two trading days of the week, these ETFs attracted net inflows exceeding $1 billion.
Analysts have noted that this influx supports a constructive market outlook, with Bitcoin closing 2025 just below critical resistance levels. Observations indicate that institutional flows have turned positive for the first time in weeks, adding stability in light of typical holiday market liquidity. However, sustaining this momentum will be paramount, with future ETF flow data deemed crucial for attracting more institutional capital.
Traders have demonstrated bullish sentiment as well, evident through increased activity in call options, particularly around the $100,000 strike for Bitcoin, signaling expectations of further upward price movement. Although traders have been actively acquiring various call options for both Bitcoin and Ether, concerns linger regarding the thin liquidity within the market, which can amplify price volatility.
Market liquidity, or the ability to handle large buy and sell orders without significant price changes, is currently low, with spot market volumes at multi-year lows. This lack of depth in order books raises the risk of abrupt price movements. Despite the recent uptick in trading activity, caution remains as liquidity issues could lead to sharp corrections or extensions in price. As the trading environment normalizes and ETF demand stabilizes, market participants are hopeful that these conditions will foster a more robust and sustainable recovery for cryptocurrencies.
