bitcoin and the broader crypto market have started 2026 strong, with analysts linking the optimistic mood to fresh new year allocations, safe haven offerings, and other factors.
Bitcoin traded near $93,700 on Tuesday, up about 1% in 24 hours and up more than 7% since January 1. it rose almost 2% to $3,224 and has risen about 9% over the same period. led the large caps, jumping almost 13% in one day to $2.40 and almost 29% for the week, while solana increased by 12% and gained about 23% over the past week.
Tax Sale Subsidies
The rally follows dismal price development through late December, in which tax-related selling and year-end accounting cleanups limited the upside, particularly during US time. US-based holders reportedly liquidated their cryptocurrency holdings at a loss to offset capital gains and reduce overall tax liability. Investors often take losses on underperforming assets to reduce the tax owed on profitable sales.
That pressure has faded, allowing for a rebound, according to observers at Singapore-based QCP Capital.
“Cryptocurrency’s alignment with broader risk assets appears less of a coincidence and more of a regime shift to start the year, helped by the decline in year-end tax loss harvesting and policy optionality back on the radar,” the firm said in a market update on Monday.
The current BTC price rally is consistent with the positive mood on Wall Street. U.S. stocks rose on Monday as the U.S. military attack on Venezuela boosted oil stocks and renewed optimism in AI boosted tech stocks. BTC and the broader crypto market are known to closely follow trends in technology stocks.
Shelter offer
The US attack on Venezuela likely added to the safe haven supply for bitcoin and other traditional security assets like gold.
“This spot move is likely a combination of new risk budgets being put to work, rotation out of better-performing assets, and a flow into headline hard assets in Venezuela,” Jeff Anderson, head of Asia at STS Digital, told CoinDesk.
Speculation that Venezuelan oil supplies could increase under US guidance could be contributing to the bullish sentiment. All things being equal, increased supply could push down oil prices, generating a disinflationary push that would allow central banks to cut rates quickly.
“Washington’s Venezuela shock could serve as a short-term catalyst for BTC. Beyond the disinflationary push from lower oil prices, market rumors have revived claims that Venezuela may control a significant “shadow” reserve of BTC, potentially comparable in scale to Strategy’s holdings. These claims are unverified,” QCP Capital said.
ETF Inflows and Bullish Options Positioning
US-listed spot ETFs launched in 2026 with strong inflows, marking the end of a two-month de-risking period that saw institutions withdraw billions and send BTC and the broader crypto market lower.
The 11 funds have cumulatively recorded a net inflow of more than $1 billion in the first two trading days of the week, according to data source SoSoValue.
“The final trading days of 2025 and the first sessions of 2026 offered a cautious but constructive reset for cryptocurrency markets. Bitcoin closed the year consolidating just below key resistance ($92,000), while institutional flows turned decisively positive for the first time in weeks. Spot ETF inflows returned into Bitcoin, Ethereum and XRP, helping to stabilize prices amid tight holiday liquidity,” said Timothy Misir, BRN research chief, in an email.
These inflows add to the bullish momentum, although it remains to be seen if they persist.
“Upcoming ETF flow numbers will be critical in determining whether this nascent recovery can attract new institutional capital or whether caution continues to dominate positioning,” Bitfinex analysts told CoinDesk.
Smart traders are positioning themselves for a continued price rally in the near term. Data from options exchange Deribit shows that traders are purchasing call options at the $100,000 strike price in anticipation of a six-figure price rally.
“Call activity is picking up on both majors. Blocks are showing buyers through the belly: January/February BTC calls at 98k to 100k, ETH calls at 3200 to 3400 for January, plus some March chokes,” Wintermute OTC Director Jake Ostrovskis said in an email. “The size is not huge, but the direction is consistent, and builds on the large $100,000 strike interest noted last week.”
Low liquidity remains a concern
Despite constructive price momentum, some observers continue to point to “poor 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 scarce liquidity means that a large order can have a huge impact on the spot price, leading to erratic price movements that often cascade.
According to Vikram Subburaj, CEO of India-based exchange Giottus, spot market volumes remain at multi-year lows, indicating weak liquidity.
“The short-term structure has turned from weakness to strength. That said, spot volumes are at their lowest level 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 sharp pullbacks. The setup is constructive, but the conviction is not yet broad-based,” Subburaj said in an email.
As desks return, demand for ETFs has also stabilized, and traders say that type of base supply is important when spot books are tight.
