Bitcoin Hits Month-Long High

Bitcoin has climbed to a one-month peak, breaking above $94,000 on January 5. This surge possibly indicates a shift from the stagnation that overshadowed the crypto market in the latter part of 2025, as it gains momentum heading into 2026.

This rally marks a crucial change in market sentiment, especially since major digital assets struggled last year, even as stocks reached all-time highs.

However, it seems like the trend has flipped, with the first trading session of the new year showing a modest yet meaningful reversal.

Since the year’s start, Bitcoin has increased over 3%, reflecting renewed energy fueled by favorable macroeconomic conditions, a resurgence in institutional interest, and a more straightforward derivatives market.

Macro Economic Changes

The recovery appears to be supported by shifts in the macroeconomic environment in the U.S. As we look toward 2026, two key trends are reshaping the investment landscape: a steepening yield curve and a structurally weaker dollar.

According to analysts from Bitfinex, the U.S. Treasury curve has significantly moved away from the inversions seen during 2022-2024.

This normalization seems driven by anticipations of policy easing, alongside rising long-term yields linked to inflation concerns and fiscal issues.

They suggest this reflects a reassessment of duration and reliability risks rather than a newfound optimism for growth. Financial conditions are still tighter than what the overall interest rate cuts would imply, suggesting a selective improvement in liquidity.

Meanwhile, the U.S. dollar has seen a notable drop.

Even though the dollar’s fundamental support remains intact—thanks to robust capital markets and a demand for U.S. Treasuries—the current weakness seems managed, likely influenced by policies aimed at boosting trade competitiveness.

This combination of a weaker dollar and rising long-term yields tends to benefit assets with defensive characteristics and short-term pricing capabilities. Bitcoin, often viewed as a hedge against fiat currency devaluation and liquidity expansion, could find itself in a favorable position during this shift.

Institutional Demand for Bitcoin Recovers

Beyond the macro factors turning favorable, the specific drivers behind Bitcoin’s price movements are largely institutional.

After a period of ETF-related selling that weakened pricing late last year, there’s been a noticeable slowdown in these trends toward the year’s end. Early 2026 is already showing tangible effects as liquidity appears to be improving.

In just the first two business days of the year, Bitcoin ETFs saw more than $1 billion in inflows, as noted by Coinperps, indicating a comeback of institutional players in this asset class.

This renewed interest extends beyond passive funds; Bitcoin treasury firms are also adding to their BTC collections.

Charles Edwards, CEO of Capriole, mentioned that:

“Bitcoin treasury companies have just turned net long again… Institutional investors are net long Bitcoin again.”

Indeed, there’s a growing number of BTC financial firms that are announcing new purchases.

For instance, Strategy Inc. (previously MicroStrategy), the largest corporate BTC holder, has reinforced its commitment by making additional significant purchases, now holding a total of 673,783 BTC.

Asset management company Strive has also recently acquired 101.8 BTC, elevating its total holdings to 7,626.8 BTC.

These actions represent a stark turnaround from late last year when such activities had slowed considerably.

Market Structure

Current market structure data indicates that this rally is resting on a healthier foundation than the speculative highs of past cycles.

Data from blockchain analysis service Check On Chain shows that Bitcoin’s surge past $94,000 coincided with a reduction in short positions, and the larger derivatives landscape seems “remarkably clean.”

Open interest in BTC futures has dropped from a peak of $98 billion in October to about $58 billion now, signaling a significant deleveraging event that might already be underway.

Moreover, the annualized funding rate remains around 5.8%, aligning with its long-term median, suggesting a market returning to a spot-driven atmosphere where price increases stem from genuine demand instead of excessive leverage.

Internally, a notable supply redistribution is backing the bullish view. Data from Santiment indicates a “very bullish” divergence in market behavior, as large stakeholders—particularly those with between 10 and 10,000 BTC—have collectively added 56,227 BTC to their balances since December 17th.

This accumulation is viewed as marking a local bottom for assets.

Interestingly, while larger entities are accumulating, retail traders show signs of skepticism. In the last 24 hours, wallets holding less than 0.01 BTC have started to take profits, perhaps anticipating a “bull’s trap” or a misleading rally.

Historically, markets tend to move inversely to the actions of smaller retail wallets, and Santiment suggests the amalgamation of whale accumulation alongside retail selling creates an environment characterized as “very bullish.” This indicates a transfer of coins from weaker hands to more committed holders.

James Cote, Chief Crypto Analyst at Real Vision, has discussed the technical adjustments supporting this trend.

He mentioned:

“Finally, we’re seeing a proper bullish correction and not just one indicator firing,”

pointing specifically to signals from the Dec. 31 Demark 13 exhaustion signal and bullish reversals in other indicators. He highlighted that this liquidity regime could historically yield a median 180-day return of almost 26%, coupled with a strong win rate.

Aiming for the Six-Digit Mark

Given these developments, traders are already speculating that the rally will extend well beyond current levels.

Since January 2, there’s been an uptick in interest regarding call options with a $100,000 strike price set to expire in January on Deribit.

Jake Ostrovskis, from Wintermute OTC, has noticed:

Call buying is dominating the desk flow, and the “aggressive put premium” is finally fading.

Comments from CryptoQuant analyst Darkfost also support this optimistic outlook.

He observed that the Bitcoin-to-stablecoin ratio on Binance, an important measure of buying potential, is at levels last seen during the March 2025 correction—right before Bitcoin surged to an all-time high of around $126,000.

Additionally, stablecoin reserves have recently gone up by about $1 billion, implying an ample reserve of “dry powder” waiting to be utilized.

He stated:

“This change could signal the early stages of a gradual rollout of liquidity, which would be a very positive signal for the market.”

While there’s still a sense of caution, the immediate landscape hints at higher price movements.

The path seems inclined upward as Bitcoin regains stability, and the selling pressure from the U.S. trading session appears to lessen. If Bitcoin keeps its momentum above $94,000, it could be on its way to breaking the psychological barrier of $100,000.