Bitcoin and the broader crypto market have begun 2026 strongly, with analysts linking the buoyant mood to fresh new-year allocations, safe-haven bids, and other factors.
Bitcoin traded near $93,700 on Tuesday, up about 1% over 24 hours and more than 7% since Jan. 1. Ether rose nearly 2% to $3,224 and is up about 9% over the same period. led large caps, jumping almost 13% in a day to $2.40 and nearly 29% on the week, while solana rose 12% and gained about 23% over the past week.
Tax selling subsidies
The rally follows dismal price action through late December that saw tax-related selling and year-end book cleanups cap upside, particularly during the U.S. hours. The U.S.-based holders reportedly liquidated their crypto holdings at a loss to offset capital gains and reduce overall tax liability. Investors typically take losses on underperforming assets to lower the tax due on profitable sales.
That pressure has faded, allowing for a bounce, according to observers at Singapore-based QCP Capital.
“Crypto’s alignment with broader risk assets is looking less like a coincidence and more like a regime shift to start the year, helped by year-end tax loss harvesting fading and policy optionality back on the radar,” the firm said in a market update Monday.
BTC’s ongoing price rally is consistent with the positive mood on Wall Street. On Monday, the U.S. stocks rallied as the U.S. military strike on Venezuela lifted oil shares, and renewed AI optimism lifted technology shares. BTC and the wider crypto market are known to closely follow trends in the technology shares.
Haven bid
The U.S. strike on Venezuela likely added to the safe-haven bid for bitcoin and other traditional safety assets such as gold.
“This spot move is likely a mix of fresh risk budgets being put to work, rotation from outperforming assets, and a flow into hard assets on the Venezuela headlines,” Jeff Anderson, head of Asia at STS Digital told CoinDesk.
Speculation that Venezuelan oil supply may increase under U.S. guidance could be aiding the bullish sentiment. Other things being equal, a higher supply could lower oil prices, generating a disinflationary impulse that would allow central banks to cut rates rapidly.
“Washington’s Venezuela shock could serve as a near-term catalyst for BTC. Beyond the disinflationary impulse from lower oil prices, market chatter has revived claims that Venezuela may control a substantial “shadow” BTC reserve, potentially comparable in scale to Strategy’s holdings. These claims are unverified,” QCP Capital said.
ETF inflows and bullish options positioning
U.S.-listed spot ETFs have launched in 2026 with strong inflows, signaling the end of a two-month de-risking period that saw institutions yank billions and send BTC and the wider crypto market lower.
The 11 funds have cumulatively registered a net inflow of over $1 billion in the first two trading days of the week, according to data source SoSoValue.
“The final trading days of 2025 and the opening sessions of 2026 delivered a cautious but constructive reset for crypto markets. Bitcoin closed the year consolidating just below key resistance ($92K), while institutional flows turned decisively positive for the first time in weeks. Spot ETF inflows returned across Bitcoin, Ethereum, and XRP, helping stabilize prices in thin holiday liquidity,” Timothy Misir, head of research, BRN, said in an email.
These inflows are adding to the bullish momentum, although it remains to be seen if they persist.
“Upcoming ETF flow prints will be critical in determining whether this nascent recovery can attract fresh institutional capital or whether caution continues to dominate positioning,” analysts at Bitfinex told CoinDesk.
Savvy traders are positioning for a continued price rally in the near-term. Data from options exchange Deribit shows traders snapping up call options at the $100,000 strike in anticipation of a price rally into six figures.
“Call activity is picking up across both majors. Blocks show buyers through the belly: BTC Jan/Feb 98k–100k calls, ETH 3200–3400 calls for January, plus some March strangles,” Jake Ostrovskis, Head of OTC at Wintermute, said in an email. “Size isn’t enormous, but direction is consistent — and builds on the large $100k strike interest flagged last week.”
Low liquidity is still a concern
Despite constructive price action, some observers continue to flag “thin liquidity” as a source of risk.
Liquidity refers to the market’s ability to absorb large buy and sell orders at stable prices. Weak or thin liquidity means a large order can have an outsized impact on the spot price, leading to erratic price moves that often cascade.
According to Vikram Subburaj, CEO of India-based Giottus exchange, spot market volumes remain at multi-year lows, indicating weak liquidity.
“The short-term structure has flipped from weakness to strength. That said, spot volumes are at their lowest since late 2023 and order books remain shallow. This makes the rally more sensitive to marginal flows and increases the risk of sharp extensions or abrupt pullbacks. The setup is constructive, but conviction is not yet broad-based,” Subburaj said in an email.
As desks return, ETF demand has also steadied, and traders say that kind of baseline bid matters when spot books are thin.