Why analysts say Q1 2026 crypto rally is back on the table!

ambcryptoPublished on 2026-01-09Last updated on 2026-01-09

Abstract

Coinbase analysts are optimistic about a crypto market recovery in early 2026, noting that the December sell-off has ended and systemic leverage has dropped significantly. This reset, alongside renewed inflows into Bitcoin and Ethereum ETFs, suggests rising institutional interest. On-chain data from Glassnode shows an 82% drop in selling pressure, while improved macro liquidity conditions—including a positive shift in the Fed balance sheet and potential stimulus measures—support a bullish outlook. Bitfinex whale positioning also indicates potential upward momentum for BTC, which could positively impact altcoins. Key upcoming events like inflation data and crypto legislation may influence the recovery trajectory.

Coinbase analysts are optimistic about a crypto market recovery in early 2026. In the firm’s weekly update, the analysts stated that the December sell-off was over, resetting the market for a likely relief bounce in Q1.

The systemic leverage also dropped to 3% of total crypto market cap, up from the frothy levels of 10% seen in 2025, the analysts noted. This meant a healthy reset after flushing out excess leverage, conditions that could drive a sustainable recovery.

Additionally, Coinbase highlighted that renewed Bitcoin[BTC] and Ethereum[BTC] ETFs inflows, along with options data, pointed to a “rising appetite for upside exposure.”

“With liquidity returning post-holidays, early flows suggest institutions are cautiously re-risking.”

Will 2020 liquidity style fuel a crypto rally?

A similar positive outlook was also shared by on-chain analysis firm Glassnode, citing an 82% drop in selling pressure.

The level of daily average profit-taking in late 2025 rose above $1 billion but has eased to $183 million in early 2026. Per the analytics firm, this was a positive setup for a rebound.

The liquidity and macro landscape were also great for a recovery.

According to analyst James Easton, the Fed balance (which tracks liquidity levels) has flipped green for the first time since 2023.

This meant improved liquidity, a trend that triggered the explosive BTC rally in 2020.

Additionally, the recent plan by President Donald Trump to purchase $200 billion in mortgage bonds has been viewed as a net liquidity injection and a positive for BTC.

In fact, JPMorgan also shared a bullish outlook for liquidity and markets for 2026.

For his part, BitMEX founder Arthur Hayes projected that this was one of the key catalysts that could rally BTC to $1 million per coin.

Bitfinex longs suggest...

Another dataset that supported the bullish case for BTC was the Bitfinex longs, or whale positioning.

In the past, Bitfinex exchange whales would scale long exposure during market dips and ease or exit during rallies. The trend has perfectly correlated with past BTC price action, and the last time Bitfinex longs eased bids, the BTC price increased by 35%.

A broader BTC lift-off could also boost the altcoin market, which has already recorded a significant recovery in early January. Meanwhile, at press time, BTC traded at $91K ahead of next week’s inflation data and crypto bill markup.

Final Thoughts

  • The liquidity landscape and crypto market reset suggested a likely rebound in early 2026
  • It’s unclear whether next week’s inflation data and crypto bill markup outcomes will affect the recovery odds.

Related Questions

QWhat is the main reason Coinbase analysts are optimistic about a crypto market recovery in Q1 2026?

ACoinbase analysts are optimistic because the December sell-off is over, which has reset the market for a likely relief bounce. Additionally, systemic leverage has dropped to a healthy 3% of the total crypto market cap from frothy levels of 10% in 2025.

QAccording to the article, what two key factors point to a 'rising appetite for upside exposure' in the crypto market?

ARenewed Bitcoin and Ethereum ETF inflows, along with options data, point to a rising appetite for upside exposure.

QWhich on-chain analytics firm reported an 82% drop in selling pressure, and what specific metric did they cite as a positive setup for a rebound?

AGlassnode reported an 82% drop in selling pressure. They cited that the daily average profit-taking eased from over $1 billion in late 2025 to $183 million in early 2026 as a positive setup for a rebound.

QWhat historical event does analyst James Easton compare the current improved liquidity to, and what specific indicator did he use to track liquidity levels?

AJames Easton compared the current improved liquidity to the explosive BTC rally in 2020. He used the Fed balance sheet, which tracks liquidity levels and has flipped green for the first time since 2023.

QWhat is the significance of the trend observed in Bitfinex longs, and what was the result the last time this pattern occurred?

AThe trend on Bitfinex, where whales scale long exposure during market dips and ease during rallies, has perfectly correlated with past BTC price action. The last time Bitfinex longs eased their bids, the BTC price increased by 35%.

Related Reads

STRC Major De-pegging's First Financial Report, How Will Strategy Repair Its Capital Flywheel?

Bitcoin treasury company Strategy released its Q2 2026 earnings report on July 31. Despite a 6.9% year-over-year revenue increase to $122 million, the company recorded a net loss of $8.22 billion, largely due to $8.32 billion in unrealized losses from Bitcoin price fluctuations. As of quarter-end, Strategy holds 843,775 BTC with an average cost of $75,000 per coin, and Bitcoin per share increased. The report highlights a critical shift in Strategy's capital model following the de-pegging of its key financing tool, STRC (Strategic Coin), which fell below its $100 target. Management's top priority is restoring STRC to its target value, aiming for a recovery by September 8. They rule out discounted STRC issuances and plan to maintain its dividend yield at 12%, instead focusing on bolstering its $3.75 billion cash reserve. Strategy has moved from a one-way "buy-and-hold" Bitcoin strategy to active capital management. This new approach, part of its "Digital Credit Capital Framework," involves flexibly managing its balance sheet across four elements: BTC, USD cash, common stock (MSTR), and digital credit securities like STRC. This allows for BTC monetization (having sold $218.4 million in BTC so far), strategic repurchases of discounted securities, and debt optimization, as seen with a $1.5 billion convertible bond buyback. The company's future hinges on two key tests: successfully re-pegging STRC to restore market confidence in its digital credit system, and a long-term recovery in Bitcoin's price to ultimately support its growth thesis.

marsbit3m ago

STRC Major De-pegging's First Financial Report, How Will Strategy Repair Its Capital Flywheel?

marsbit3m ago

STRC's First Financial Report Post-Depegging, How is Strategy Restoring the Capital Flywheel?

On July 31, 2026, Bitcoin treasury company Strategy released its Q2 financial report. Despite a 6.9% year-over-year increase in revenue to $122 million, the company recorded a substantial net loss of $8.22 billion, primarily due to $8.32 billion in unrealized losses from Bitcoin holdings. While Strategy's core Bitcoin strategy remains intact—its holdings grew 11% to 843,775 BTC—the company is undergoing a fundamental shift in its capital model. Following the de-pegging of its key financing tool, the STRCoin (STRC), from its $100 target in May, Strategy has pivoted from a one-directional "raise funds, buy Bitcoin" cycle to a more dynamic, multi-asset capital management approach. A key part of this new framework is the "Monetization Program," through which Strategy has sold approximately $218.4 million worth of BTC to bolster liquidity. The company's top priority is repairing STRC's peg, committing not to issue discounted shares until it returns to its target range. It has initiated a $1 billion buyback program for discounted digital credit securities, having repurchased $28.9 million face value of STRC so far. Management aims to restore the peg around September 8, 2026. Strategy now actively manages a matrix of assets: Bitcoin (for accumulation or strategic sales), USD cash reserves (now at $3.75 billion), common stock (MSTR), and digital credit securities like STRC. This allows for tactical moves like repurchasing discounted debt or equity to capture value. The future success of Strategy's "capital flywheel" hinges on two factors: the short-term ability to successfully re-peg STRC to restore market confidence in its digital credit system, and the long-term price trajectory of Bitcoin, upon which its entire investment thesis ultimately depends.

Odaily星球日报8m ago

STRC's First Financial Report Post-Depegging, How is Strategy Restoring the Capital Flywheel?

Odaily星球日报8m ago

AWS Accounts for 60% of Operating Profit, Amazon Delivers Q2 Results with No Weak Spots

Amazon reported its Q2 2026 financial results, with total sales reaching $200.6 billion, maintaining year-over-year growth. Net profit was $62.6 billion, significantly boosted by a $53.4 billion non-operating pre-tax gain primarily from its investment in AI company Anthropic. The more indicative operating profit was $27.5 billion. Amazon Web Services (AWS) was the key profit driver, contributing 60.5% of the company's operating profit. AWS revenue grew 36.8% year-over-year, with its operating profit rising nearly two-thirds. This growth provides crucial financial support for Amazon's broader investments in retail and infrastructure. Other segments also showed solid performance. Advertising revenue grew 26.2%, while third-party seller services and online stores maintained positive momentum, strengthening the core retail business. Despite strong profits, Amazon's trailing twelve-month (TTM) free cash flow turned negative, as $169 billion in property and equipment investments (largely for data centers and AI) outpaced $161.4 billion in operating cash flow. This highlights the company's heavy ongoing capital expenditure, even as investment gains inflate net income. The results present a dual picture: robust operational earnings led by AWS alongside massive reinvestment into future growth, particularly in AI infrastructure.

marsbit14m ago

AWS Accounts for 60% of Operating Profit, Amazon Delivers Q2 Results with No Weak Spots

marsbit14m ago

With Two Consecutive Quarters of Losses, Coinbase Must Rely on Paths Beyond Trading

Coinbase posted its second consecutive quarterly net loss of $359 million on $1.22 billion in revenue for Q2, highlighting its vulnerability to crypto market cycles where weaker prices and lower volatility reduce user trading. However, the report also reveals a strategic shift in its business model. Despite a 25% quarter-over-quarter decline in global spot trading volume, Coinbase increased its market share to a company-record 10.3%. This suggests its position as a compliant U.S. on-ramp is strengthening even in a cooler market. A key development is the diversification of revenue streams. Transaction revenue fell to $599 million, nearly equaling subscription and services revenue of $555 million. Stablecoin services, generating $292 million, are becoming a crucial revenue "floor." This income, derived from interest on the $20 billion average USDC balance held on its platform, is less tied to daily trading activity. Furthermore, while spot trading volume dropped significantly, derivatives volume held steady at $1.03 trillion. Coinbase is pushing to integrate spot, stablecoin, and derivatives liquidity to create a more interconnected and sticky ecosystem for users. The GAAP net loss includes non-cash expenses like stock-based compensation and crypto asset valuation changes. Its adjusted EBITDA remained positive at $208 million for the 14th straight quarter, indicating core operations can cover ongoing costs. The company is also reducing expenses to manage the downturn. The central question moving forward is whether Coinbase's growing market share, stablecoin revenues, and expanding product integration can sufficiently offset the inherent cyclicality of its core trading business during future market contractions.

marsbit23m ago

With Two Consecutive Quarters of Losses, Coinbase Must Rely on Paths Beyond Trading

marsbit23m ago

June Quarter for Earth's Most Valuable Tech Company: Apple's Revenue Breaks $100 Billion for the First Time

On July 30, Apple announced its quarterly results, with revenue surpassing the $100 billion mark for the first time in a June quarter, reaching $109.4 billion—a 16.4% year-over-year increase. This record performance was driven by all-time highs for the period in iPhone, Mac, and Services sales. Key to this growth was the iPhone, which accounted for nearly two-thirds of the $15.4 billion revenue increase compared to the same period last year. Both Europe and Greater China contributed significantly, with the latter seeing 22.4% growth. While Services revenue represented only 28.1% of total revenue, it contributed 42.4% of gross profit due to its high 75.6% gross margin, acting as a profit stabilizer alongside the hardware surge. Notably, EPS grew 28.7%, faster than revenue. However, Apple disclosed that a one-time tariff refund added approximately 2 percentage points to the gross margin and $0.11 to EPS. Excluding this impact, the adjusted EPS growth rate would be approximately 21.7%. This distinction highlights two separate dynamics: operational growth from core businesses and a temporary boost to profitability. The report ultimately paints a picture of broad-based growth, with hardware driving scale, Services enhancing profitability, and a one-time item influencing the profit growth rate.

marsbit23m ago

June Quarter for Earth's Most Valuable Tech Company: Apple's Revenue Breaks $100 Billion for the First Time

marsbit23m ago

Trading

Spot
活动图片

Hot Categoriesright-arrow

Hot Tagsright-arrow