Written by: 1912212.eth, Foresight News
BTC has not experienced four consecutive monthly declines since 2019. Now, this phenomenon seems to still be in effect. Since the drop in October this year, BTC has continued to decline for three months, hitting a low of around $80,000.
Starting from January 1, Bitcoin's daily chart achieved five consecutive increases, and on January 5, it even broke through $93,000. ETH also strongly broke through $3,200. Meme coins like PEPE, BONK, PENGU, and BOME have recently taken turns topping the gainers' list.
According to Coinglass data, the total liquidation of open contracts across the network reached $216 million in 24 hours, with $168 million in short positions being liquidated.
The Fear and Greed Index, after more than three months of stagnation, rarely rose to 42 today, returning to a neutral market sentiment.
The global risk asset market saw a broad rise today, with the Japanese and South Korean stock markets leading the way. The South Korean KOSPI index rose over 2.27% in the morning session, breaking through 4,400 points for the first time, setting a new historical high. The Nikkei 225 index surged over 1,100 points in the morning, just 2% shy of breaking its historical high. The Shanghai Composite Index opened with a 0.46% increase, approaching 4,000 points. The Hang Seng Index opened up 0.09%.
In the U.S. stock market, S&P 500 futures rose 0.46%, Nasdaq futures increased 0.26%, and Dow futures climbed 0.58%. Precious metals surged significantly, with spot gold breaking through $4,420 per ounce, a 24-hour increase of over 2%, and spot silver surpassing $76 per ounce, soaring 4.5%.
Is a major altcoin rebound coming?
Federal Reserve Injects $16 Billion in Liquidity by End of 2025
Cryptocurrency assets led by BTC are closely linked to global market liquidity. When liquidity is low, prices struggle to rise significantly; when liquidity is abundant, prices can continue to recover.
On December 30, 2025, according to Barchart data, the Federal Reserve injected $16 billion into the U.S. banking system through overnight repurchase agreements, marking the second-largest liquidity injection since the COVID-19 pandemic.
This action is typically viewed by the market as a supportive signal from the Federal Reserve in response to potential bank liquidity shortages or financial stress. Although the charts show a recent surge in injection amounts, the overall trend reflects a shift towards looser monetary policy. In the cryptocurrency market, such liquidity injections often stimulate a resurgence in risk appetite, as cheap funds easily flow into high-risk asset classes, driving up cryptocurrency prices. Investors may interpret this as the Federal Reserve's unwillingness to allow a hard landing for the economy, thereby boosting market confidence and avoiding more severe recession risks.
On December 31, BitMEX co-founder Arthur Hayes stated that liquidity in the crypto market may have bottomed out in November and is slowly recovering, indicating that it is time for cryptocurrencies to start rising.
Danske Bank's foreign exchange and interest rate strategist Jens Naervig Pedersen noted in a report that global market liquidity is expected to remain thin 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 for next week includes important labor market figures from the U.S., such as the December non-farm payroll report to be released on January 9 and the ISM survey. During the year-end period, many market participants are on vacation or closing positions, leading to generally low market liquidity.
BTC and ETH Spot ETF Start the Year with Significant Net Inflows
After months of lackluster performance, Bitcoin spot ETF data saw a net inflow of $355 million on December 30, and another net inflow of $471.14 million on January 2.
The sudden increase in net inflows is relatively significant in both magnitude and momentum.
For ETH spot ETFs, there was a net inflow of $67.84 million on December 30, which reached $174.43 million on January 2, marking a new high for single-day net inflows since last December.
Currently, the performance of both ETFs still requires ongoing observation, but the net inflow at the start of the year has a notably positive effect on boosting coin prices.
What’s Next
JackYi, founder of Liquid Capital, tweeted on January 3, "Before the big bull market in 2026, shorts will cover early with small losses, but later they will suffer greatly. Those still bearish in the market are either talkers or cannon fodder. After more than a month of turbulence, the bulls will surely have their moment, pessimists are always right, and optimists always move forward."
On the same day, 10x Research also published an article hinting at a potential structural rebound opportunity in the market. "Beneath the surface of the cryptocurrency market, significant changes are occurring. As Bitcoin's dominance begins to decline, our model has detected key turning signals historically marking a shift from defense to opportunity. This cycle is worth noting not for individual tokens or narratives, but for the broad collaborative validation pattern forming between mainstream coins and selected altcoins. Momentum effects, relative performance, and market participation are beginning to resonate, which traders should not overlook.
10x Research stated that the current environment is not a broad bullish market, and it is not advisable to wait passively. The next phase will test discipline, strategic rules, and active position management; clear risk control will become the key to distinguishing winners from market noise. Most investors wait for headline news to guide direction, while traders should focus on market structure and signal validation.
Analysts from blockchain analysis platform Santiment noted that cryptocurrency market participants showed strong sentiment on social media at the beginning of the year, but also warned that the market's ability to move further upward depends on whether retail investors can remain rational. "We need retail investors to maintain a certain level of caution, a certain level of pessimism, and a certain level of impatience," Santiment analyst Brian Quinlivan stated in a YouTube video released on Saturday. Although other cryptocurrency sentiment indicators show that market participants are fearful, Quinlivan said Santiment's social media data points in the opposite direction. "Current sentiment is very positive," he said, "which is usually somewhat concerning, but this may just be a normal rebound after the holiday return." Quinlivan expressed that he is not overly worried about the emergence of "massive FOMO sentiment," but added that if Bitcoin quickly rises to $92,000, such sentiment may 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 efforts to realize losses. This situation is gradually becoming apparent as BTC prices fluctuate within a narrow range. It reflects that investors are becoming increasingly fatigued over time, which is a common characteristic of a prolonged bear market phase.
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