Written by: 1912212.eth, Foresight News
BTC has not experienced four consecutive months of decline on the monthly chart since 2019. Now, this mystique still seems to be in effect. Since the drop in October this year, BTC has continued to decline for three months, with the lowest near $80,000.
Starting from January 1, Bitcoin’s daily chart achieved five consecutive days of gains, and on January 5, it even broke through $93,000. ETH also strongly broke through $3,200. Meme coins such as PEPE, BONK, PENGU, and BOME have recently taken turns climbing the gain charts.
Data from Coinglass shows that the total open interest contracts on the network experienced liquidations of $216 million in 24 hours, with short positions liquidated at $168 million.
After more than three months of continuous low sentiment, the Fear and Greed Index today rarely rose to 42, returning to a neutral market sentiment.
The global risk asset markets saw a broad rally today, led by Japan and South Korea stocks. South Korea’s KOSPI index rose over 2.27% in early trading, breaking through 4,400 points for the first time and hitting a new all-time high. The Nikkei 225 index surged over 1,100 points in early trading, just 2% shy of its all-time high. The A-shares Shanghai Composite Index opened up 0.46%, approaching 4,000 points. The Hang Seng Index opened up 0.09%.
In the US markets, S&P 500 futures rose 0.46%, Nasdaq futures increased 0.26%, and Dow futures up 0.58%. Precious metals surged significantly, with spot gold breaking through $4,420 per ounce, up over 2% in 24 hours, and spot silver surpassing $76 per ounce, a jump of 4.5%.
Is a major rebound coming for altcoins?
The Federal Reserve injected $16 billion in liquidity at the end of 2025.
Cryptocurrencies led by BTC are closely linked to global market liquidity. When liquidity is low, prices tend not to rise significantly; when liquidity is abundant, prices can continue to rebound.
On December 30, 2025, according to Barchart data, the Federal Reserve injected $16 billion into the U.S. banking system through overnight repurchase agreements, the second-largest liquidity injection since the COVID-19 pandemic.
This move is usually seen by the market as a supportive signal from the Fed in response to potential banking liquidity shortages or financial stress. Although recent charts show a surge in injection volume, the overall trend reflects a move toward easing monetary policy. In the cryptocurrency market, such liquidity injections often stimulate risk appetite, as cheap funds easily flow into high-risk assets, driving crypto prices higher. Investors may interpret this as the Fed’s reluctance to let the economy hard land, thus boosting market confidence and avoiding a more severe recession.
On December 31, BitMEX co-founder Arthur Hayes stated that liquidity in the crypto market may have bottomed in November and is slowly recovering, and that it is time for cryptocurrencies to start rising.
Jens Naervig Pedersen, a foreign exchange and interest rate strategist at Danske Bank, said in a report that global market liquidity is expected to remain subdued this week but may rebound next week. The strategist pointed out: “Looking ahead, as more economic data is released, market liquidity should improve next week.” Key data next week include important U.S. labor market reports, such as the December non-farm payrolls released on January 9 and the ISM survey. During the year-end period, many market participants are on holiday or closing positions, leading to typically lower market liquidity.
BTC and ETH spot ETFs see large net inflows at the start of the year
After months of poor performance, Bitcoin spot ETF saw a net inflow of $355 million on December 30, and another $471.14 million on January 2.
The sudden increase in net inflow is relatively significant in magnitude and momentum.
For ETH spot ETFs, the net inflow was $67.84 million on December 30, reaching $174.43 million on January 2, setting a new high since December last year for single-day net inflow.
The performance of these ETFs still needs ongoing observation, but the net inflow at the start of the year has a positive effect on boosting prices.
What’s next?
Liquid Capital founder JackYi tweeted on January 3, saying, “Before the 2026 bull market, short sellers will close early with small losses, and later close with big losses. Anyone still bearish in the market is either just talking trash or is cannon fodder. After more than a month of volatility, the bulls will surely rise, pessimists are always right, optimists always move forward.”
On the same day, 10x Research also hinted at a potential structural rebound opportunity in the market. “Important changes are happening beneath the surface of the crypto market. As Bitcoin’s dominance begins to decline, our models detect a critical turning point signaling a shift from defense to opportunity. This cycle is not about individual tokens or narratives but about the broad collaborative verification pattern forming between mainstream coins and selected altcoins. Momentum effects, relative performance, and market participation are beginning to resonate, and traders should not ignore this.”
10x Research stated that the current environment is not a broad rally, nor is it advisable to wait passively. The next phase will test discipline, strategic rules, and active position management more. Clear risk control will be key to distinguishing profitable traders from market noise. Most investors wait for headline news to guide their direction, but traders should focus on market structure and signal verification.
Analysts from blockchain analytics platform Santiment pointed out that early-year sentiment among crypto market participants on social media is strong, but warned that whether the market can further rise depends on retail investors maintaining rationality. “We need retail investors to remain cautious, somewhat pessimistic, and a bit impatient,” Santiment analyst Brian Quinlivan said in a YouTube video posted on Saturday. Despite other crypto sentiment indicators showing fear among market participants, Quinlivan said Santiment’s social media data points in the opposite direction. “Current sentiment is very positive,” he said, “which is usually a bit concerning, but this may just be a normal rebound after the holiday season.” Quinlivan said he is not overly worried about a surge of FOMO, but added that if Bitcoin quickly rises to $92,000, such emotions could flood the market.
However, data charts also show some pessimistic sentiment in the market.
Glassnode recently tweeted that the slowdown in capital inflows coincides with long-term holders increasing their losses. As BTC price fluctuates within a narrow range, this situation is gradually becoming apparent. This reflects investor fatigue over time, a common feature of prolonged bear markets.
