Crypto Oversupply Concerns and Bitcoin Price Volatility Highlight 2026 Market Uncertainty

Bitcoin edged up roughly 0.4% to around $91,164, while Ethereum (ETH) declined to $3,105 as of January 12, 2026. The cryptocurrency market has experienced volatility following a significant price correction in late 2025, with investors evaluating macroeconomic factors and regulatory developments according to market analysis. Institutional demand remains a key driver, with Strategy’s recent $1.25 billion bitcoin acquisition pushing its total holdings to 687,410 BTC.

Standard Chartered has cut its medium-term price forecast for Ethereum, reducing its 2026 target to $7,500 from $12,000. The bank cited broader weakness in digital asset markets as a reason for the adjustment. Despite this, Standard Chartered expects Ether to surpass $40,000 by 2030, based on long-term market fundamentals.

A new quantum-safe Bitcoin fork, Bitcoin Quantum (BTQ), has launched its testnet with a focus on addressing potential vulnerabilities to quantum computing attacks. The fork replaces Bitcoin’s current ECDSA signatures with ML-DSA, a NIST-standardized post-quantum cryptographic algorithm. The initiative aims to secure a portion of the 6.26 million BTC currently at risk of quantum threats.

Why Did This Happen?

Bitcoin’s price movement in early 2026 has been influenced by several factors, including tax-loss harvesting and institutional ETF flows. Entrepreneur Lark Davis attributed the recent rebound to the end of tax-loss harvesting, which removed selling pressure and allowed a rebound in demand. Spot Bitcoin ETFs have seen increased inflows, contributing to the upward movement in price.

Ethereum’s price decline has been driven by weaker-than-expected Bitcoin performance and a broader bearish sentiment in the digital asset market. Standard Chartered’s global head of digital assets research, Geoff Kendrick, noted that Bitcoin’s dominance has had a dampening effect on Ether’s prospects against the USD.

How Did Markets React?

Crypto-linked U.S. stocks showed a mixed response to the recent price movements. Coinbase shares rose 0.6%, while Riot Platforms fell approximately 2%. Bitcoin’s price remained below its October 2025 peak near $126,000, keeping the market cautious about changes in interest rates and liquidity.

The U.S. Consumer Price Index (CPI) data for December 2025 is expected to influence Bitcoin’s near-term trajectory. A hotter-than-expected inflation report could push bond yields and the dollar higher, increasing pressure on Bitcoin and crypto-linked stocks. Traders are also monitoring ETF outflows, which could exacerbate downward price pressure.

What Are Analysts Watching Next?

Analysts are closely watching Bitcoin’s ability to reclaim and hold above the $94,500 resistance level. If Bitcoin breaks this level and sustains it, it could signal a stronger upward move toward the $100,000 psychological barrier. The Crypto Fear & Greed Index has risen to 41, indicating a shift in sentiment as bullish momentum returns.

Ethereum’s staking activity is another key area of focus. With Ethereum staking rewards at a rate of 2.81%, and Bitmine Immersion Technologies holding 4.168 million ETH, the long-term staking strategy of institutional investors could influence Ethereum’s price trajectory.

The U.S. Federal Reserve’s monetary policy and the potential impact of the DOJ’s investigation into Fed Chair Jerome Powell remain critical variables. If the investigation disrupts the Fed’s independence, it could have broader implications for asset correlations and risk appetite. Traders are balancing institutional demand for Bitcoin with macroeconomic uncertainty, as the market awaits key data and policy developments.