Original Title: Crypto's Constructive Start to 2026
Original Author: Tanay Ved, Coin Metrics State of the Network
Translated by Luffy, Foresight News
Too Long; Didn't Read
At the beginning of 2026, the cryptocurrency market regained its upward momentum. Despite increased geopolitical uncertainties, the price of Bitcoin rose to $94,000, and the total market capitalization of the cryptocurrency market approached $3.3 trillion.
· The spot bitcoin ETF reversed the outflow trend at the end of the year on January 5, with a net inflow of approximately $400 million; whale selling activity has somewhat subsided, while retail investors are actively accumulating positions.
The derivatives market positions show a cautiously bullish trend. For options contracts expiring by the end of January, Bitcoin's call options have open interest concentrated at the $100,000 strike price, while Ethereum's call options have open interest concentrated at the $3,500 strike price.
A Green Start for 2026
After weeks of consolidation during the holiday period, the cryptocurrency market made a strong start to the new year. The price of Bitcoin surged to $94,000, and the total market capitalization of cryptocurrencies approached $3.3 trillion.
Despite the potential for a U.S. military action against Venezuela, which could escalate geopolitical tensions, the cryptocurrency market has remained resilient. As the prices of precious metals such as gold and silver surged toward year-end, crypto assets have also gradually recovered their losses. Moreover, the strength of some altcoins signals a rise in market risk appetite. However, due to the evolving geopolitical situation, global markets may still experience significant short-term volatility.
Data Source: Coin Metrics and Reference Rates
Over the past month, standout performers included memecoins such as PEPE and BONK, privacy-focused Zcash (ZEC), and the institutional credit platform Maple Finance (SYRUP). This trend indicates a renewed interest in memecoins, privacy coins, and DeFi tokens with clear revenue-sharing mechanisms and visible cash flow growth.
In contrast, Hyperliquid (HYPE) and Aster (ASTER) underperformed. The reason lies in the fact that as Lighter (LIT), a decentralized perpetual contract trading platform based on zero-knowledge rollup technology, launched its token airdrop, market attention within the decentralized perpetual contract trading platform sector became divided. During the same period, the decentralized lending protocol Aave (AAVE) also experienced a decline. This was due to heated debates within the community over token holder rights, revenue distribution models, and the role of Aave Labs within the decentralized autonomous organization (DAO). These discussions led to multiple rounds of governance voting. This controversy reflects a broader trend in the entire DeFi industry: leading protocols such as Uniswap and Aave are reevaluating the pathways to return value to token holders.
Institutional capital is flowing back, and large whales are selling off, cooling down the market.
The spot Bitcoin ETF has reversed the outflow trend at the end of the year, with a net inflow of over $350 million on January 5th, marking a return of institutional capital to the crypto market. In the days around New Year's, the spot Bitcoin ETF had recorded a net outflow of over $320 million. This reversal in trend suggests that as the first quarter of 2026 begins, institutional investors are showing renewed interest in allocating capital to cryptocurrencies.
The scale of institutional cryptocurrency asset reserves is also continuously expanding: the U.S. Strategic Bitcoin Reserve added 1,287 new bitcoins, bringing its total holdings to 673,783 bitcoins. Meanwhile, Bitmine increased its Ethereum reserves to 4.14 million ETH, accounting for approximately 3.4% of the total Ethereum supply.
Data Source: Coin Metrics
On-chain data shows that since the beginning of January, large whale wallets holding between 1,000 and 10,000 bitcoins have significantly reduced their token selling activities, indicating that selling pressure from this group is easing. At the same time, retail investors holding less than one bitcoin have been accelerating their purchases since mid-November last year. As cryptocurrency prices have retreated from their highs and consolidated, retail investors are taking the opportunity to accumulate at lower levels. The combination of reduced whale selling and continued retail buying is creating a favorable market dynamic.
Data Source: Coin Metrics
Derivatives Market Signals Cautious Bullishness
Position data from the derivatives market indicates a cautiously optimistic outlook for the first quarter of 2026. The following two charts show the number of open interest contracts for Bitcoin and Ethereum options on Deribit, expiring on January 30, 2026, categorized by strike price. These charts visually reflect the directional bets of options traders on short-term market movements.
Data Source: Coin Metrics
Options market data shows that for contracts expiring on January 30, a large number of Bitcoin call option open contracts are concentrated around the 100,000 USD strike price, while Ethereum call option open contracts are concentrated around the 3,500 USD strike price. This indicates that traders are betting on short-term upside potential in cryptocurrencies, but without showing excessive exuberance. Downside protection mechanisms are also in place: Bitcoin put option open contracts are concentrated around the 70,000 to 90,000 USD range, and the overall open contract structure still favors the bullish side.
Data Source: Coin Metrics
The futures market is sending out similar signals. Toward the end of the year, the open interest of Bitcoin and Ethereum futures slightly declined, but it quickly rebounded after entering January. Currently, the nominal open interest on major trading platforms is approaching the high levels seen in late December of last year. In late December last year, due to widespread de-leveraging in the market, the funding rates for Bitcoin and Ethereum perpetual contracts briefly turned negative. However, they have since returned to positive levels, with Ethereum's funding rate showing a significantly stronger performance compared to Bitcoin. Overall, the market is in a cautiously bullish state, and there are no signs of excessive saturation yet.
Stablecoin Fund Flows and On-chain Activity
The flow of funds in stablecoins is an important indicator for observing inflows and outflows in the cryptocurrency market. In early December of last year, the stablecoin market recorded continuous net inflows. However, as the year came to a close, the flow turned negative, with a net outflow exceeding $1 billion in a single week. Entering January 2026, the flow of stablecoin funds has stabilized and has once again turned into a net inflow. If this trend continues, it could provide strong support for a sustained rise in the cryptocurrency market.
Data Source: Coin Metrics
On-chain activity data further confirms the positive outlook for the market. Following the Ethereum Fujisaki upgrade in December last year, the Ethereum mainnet's daily transaction volume reached a historical high of 2.23 million transactions, while the number of active addresses also approached a historical peak. At the same time, stablecoin on-chain transfer volumes in December last year also set a new record. This phenomenon indicates that funds flowing into the crypto market are not idle, but are actively circulating within the ecosystem.
Conclusion
The market data from the first week of 2026 outlines a cautiously optimistic picture, as the cryptocurrency market gradually regains its footing. Institutional capital is returning, whale selling has cooled, and the derivatives market is sending positive signals. Combined with persistently high on-chain activity and a return of net inflows into stablecoins, multiple positive factors are jointly supporting the market's upward movement. However, it is important to remain cautious, as the evolving geopolitical situation between the United States and Venezuela could still become a potential risk factor for global market volatility in the short term.
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