16.01.202617:15 Forex Analysis & Reviews: Crypto market: current situation and outlook

At the beginning of 2026, the crypto market is showing a recovery in interest, but without signs of overheating. The key question for the coming months is whether the current growth will mark the start of a new structural trend or remain a phase of technical recovery.

By mid-January 2026, the cryptocurrency market is displaying mixed dynamics. After strong gains at the start of the month, major digital assets have moved into a phase of correction and consolidation.

Nevertheless, the market remains in a zone of heightened investor interest. Total crypto market capitalization as of the end of the current week and mid-January stands at around USD 3.20 trillion, according to TradingView, while Bitcoin dominance is holding at 59%, underscoring its key role as the primary benchmark for the entire sector.

The Crypto Fear & Greed Index has risen into the "greed" zone for the first time since last autumn (to 62 out of 100), signaling growing optimism and renewed interest in risk assets.

Bitcoin is trading near the USD 95,500.00 level, remaining the main beneficiary of the current market phase. However, the nature of this growth raises questions.

According to publicly available data, BTC's rise into the USD 96,000.00–97,000.00 range was largely driven by the liquidation of short positions in the futures market. Spot market volumes remain moderate, and a sustained inflow of new capital has not yet been recorded.

Price gains were driven primarily by forced short covering rather than by systematic buying, crypto market analysts note, adding that the USD 93,000.00–110,000.00 range remains an area of active selling by long-term Bitcoin holders.

At the same time, there are several important developments:

• the pace of selling by long-term investors has slowed noticeably compared to the end of 2025;
• supply-side pressure is easing, though it has not disappeared entirely;
• for a sustainable uptrend to form, the market needs to confidently absorb this volume of supply.

Institutional flows remain one of the key factors supporting the market. Over the past trading sessions, significant inflows into Bitcoin ETFs have been observed. Ethereum ETFs are also recording steady capital inflows.

This indicates that large players are not leaving the market, but are acting more selectively, focusing on core assets.

At present, Ethereum is holding within the USD 3,200.00–3,400.00 range, showing moderate growth. However, selective demand persists in the altcoin segment, and the market has yet to display a broad "altseason." Investor capital remains concentrated in BTC and ETH, favoring assets with clear liquidity and institutional support.

Fundamental factors: geopolitics, Fed, and US dollar

Geopolitical and monetary factors have provided additional support to the crypto market. Rising tensions in Latin America and the Middle East have increased interest in assets alternative to the US dollar. Pressure on the dollar has also persisted amid political disputes over the Federal Reserve's independence, with expectations of a more accommodative monetary policy enhancing the appeal of digital assets.

At the same time, delays in the adoption of cryptocurrency regulation in the United States are temporarily limiting growth and adding uncertainty.

Crypto market outlook

Crypto market analysts generally agree that the market is in a transitional phase:

• recent gains have been largely technical in nature;
• a sustainable bullish trend will require demand to expand beyond Bitcoin;
• the key factor will be the direction of liquidity flows in 2026 and the structure of capital allocation.

In the coming weeks, the market may continue a moderate rise or move into a broad consolidation range. Bitcoin is likely to remain the main beneficiary of institutional capital inflows.

In an alternative scenario, should liquidity decline or regulatory risks intensify, a correction and a return to key support levels are possible, with the market refocusing on defending achieved positions.

Conclusion

At the start of 2026, the crypto market is showing a recovery in interest without signs of overheating. Bitcoin's rise is still outpacing the development of spot demand, and the sustainability of the trend will depend on:

• the behavior of long-term holders,
• further ETF inflows,
• macroeconomic and geopolitical factors.

The key question for the coming months is whether the current growth will become the beginning of a new structural trend or remain a phase of technical recovery.