Bitcoin's Calm Is a Trap: Strategist Sees Volatility Bull Market Ahead

Bitcoin enters 2026 with a mix of caution and optimism. After hitting an all-time high in late 2025, the cryptocurrency fell sharply, dropping to around $80,000. Now, it trades near $94,000 after a modest rebound. Industry executives and investors have varied forecasts for 2026, with some predicting prices could rise to $225,000.

Analysts are closely watching on-chain metrics that suggest Bitcoin's market is stabilizing. Over the past week, realized profit-taking pressure has cooled, with daily profits falling to about $183.8M. This trend indicates a decline in selling pressure, allowing the price to recover. However, structural overhead supply remains a concern, particularly between $92.1k and $117.4k.

Market participants are also observing early signs of institutional re-entry. U.S. spot ETF flows have turned positive again, reversing the outflows seen in late 2025. Futures open interest has stabilized and is rising, reflecting renewed interest from derivatives traders. Meanwhile, the largest options open interest reset has removed over 45% of positioning, clearing hedging constraints and offering a cleaner view of new risk exposure.

Why Did This Happen?

Bitcoin's price action in early 2026 is shaped by a combination of macroeconomic and on-chain factors. One key driver is the shift in risk appetite among institutional investors. After a period of cautious withdrawal, spot ETF inflows have returned, signaling renewed confidence. This re-entry is particularly notable as it coincides with price stabilizing near $90,000.

The macroeconomic backdrop also plays a role. Lower interest rates and expectations of U.S. Federal Reserve easing have supported risk assets, including Bitcoin. However, geopolitical uncertainties and AI sector volatility remain concerns for broader market sentiment. This environment has pushed investors toward defensive positioning, limiting Bitcoin's upside in the short term.

How Did Markets React?

Market reactions have been mixed, with Bitcoin ETFs recording $681 million in outflows during the first week of 2026. This outflow occurred despite an initial surge of inflows in early January. The shift reflects a broader move to risk-off positions as investors await clearer macroeconomic signals.

In contrast, futures and options markets show more optimism. Implied volatility has reached a short-term low but is now rising again as traders accumulate long volatility positions. This suggests a cautious re-engagement with the market rather than a full-blown bullish shift.