Bitcoin Intraday Rally Followed by Pullback Highlights Structural Resistance, Market Optimism for Q1 Breakout Fading

Bitcoin entered 2026 with a short-lived intraday rally, reaching $94.4k before pulling back. On-chain metrics indicate a cooling in profit-taking pressure, particularly among longer-term holders, allowing the price to stabilize after a prolonged drawdown in late 2025. This stabilization has allowed for a modest rebound in early January, suggesting a shift in market behavior.

Despite this relief rally, Bitcoin faces structural overhead supply between $92.1k and $117.4k. This zone represents a dense distribution area where recent buyers accumulated during the cycle highs and held through the drawdown to ~$80k. As a result, these investors now face rising breakeven sell-side pressure, creating a natural friction point for further upside.

Key recovery thresholds remain crucial for confirming a broader transition out of the bearish phase. The Short-Term Holder Cost Basis model has stabilized near the mean, at $99.1k. A sustained reclaim of this level would signal renewed confidence among newer market participants and mark a shift toward more constructive trend dynamics.

Why Is Structural Resistance Critical Now?

The current price environment reflects a mix of easing short-term selling pressure and persistent overhead supply. During the drawdown from the ATH to ~$80k, the market experienced a marked reduction in realized profit-taking, dropping from over $1B per day to $183.8M per day in late December 2025. This exhaustion of distribution-side pressure has allowed for a limited rebound in early 2026, but it has not yet overcome structural resistance.

Overhead supply in the $92.1k–$117.4k range remains a major constraint. This cohort of investors is now positioned to sell without realizing a loss, creating a natural barrier to further price appreciation. Overcoming this resistance will require time and resilience to absorb the sell-side pressure before a sustained bull phase can resume.

How Are Market Participants Re-Risking in 2026?

Corporate treasury demand has continued to act as a stabilizing buffer beneath price, though it remains episodic rather than structural. Accumulation surges tend to coincide with pullbacks and consolidation phases. However, these surges have not evolved into sustained accumulation, suggesting that treasury participation remains price-sensitive and opportunistic.

US spot ETF flows have begun to re-emerge after a period of net outflows in late 2025. Recent weeks have marked a clear inflection back into positive net inflows, particularly as price stabilized in the low-$90k range. This shift suggests institutional spot demand is re-establishing itself as a constructive tailwind rather than a source of sell-side liquidity.

Options and volatility markets are also signaling a transition toward selective re-risking. The largest options open interest reset on record cleared more than 45% of outstanding positioning at year-end, removing structural hedging constraints and offering a cleaner read on fresh risk expression. Implied volatility has bottomed, with taker demand gently lifting the volatility surface.

What Do Analysts Expect in the Near Term?

Market participants are now closely monitoring whether bulls can reclaim the Short-Term Holder Cost Basis at $99.1k. A prolonged inability to recover above this level could increase the risk of a deeper bearish extension, as seen in earlier transitional failures. STH-MVRV has rebounded from a low of 0.79 to 0.95, indicating an average unrealized loss of about 5% for recent investors.

Institutional participants are also watching for signs of renewed engagement in derivatives markets. Aggregate futures open interest has stabilized and is turning higher, reflecting a willingness among traders to redeploy risk. While the pace of re-engagement remains measured, this trend suggests a gradual normalization of liquidity conditions.

Options flows in the first weeks of the year show a clear tilt toward calls, signaling a rotation away from defensive hedging toward upside participation. Call buying accounted for 30.8% of total options activity in the past week, with volatility sellers also taking advantage of higher implied volatility to sell calls. Dealers are now predominantly short gamma between $95k and $104k, which mechanically reinforces upside price movement during strength. This is a key structural shift compared to the long-gamma conditions that prevailed into year-end.

Analysts suggest the market is transitioning from defensive deleveraging into selective re-risking, with a clearer structure and renewed optionality for expansion. While structural accumulation remains measured, the clearing of positioning overhangs and the re-emergence of upside expression indicate that Bitcoin begins 2026 on a cleaner footing.