Early 2026 Crypto Rally: Is Altcoin Season Returning?

Original | Odaily Planet Daily (@OdailyChina)

Author | Wenser (@wenser 2010 )

At the beginning of the new year, the cryptocurrency market has experienced a rare upward breakout. Bitcoin (BTC) successfully broke through the key resistance level of $90,000, while major coins like Ethereum (ETH) and Solana (SOL) have finally risen above $3,100 and $130, respectively. Even more astonishing, signaling a potential bull market return, are the rapid rebounds of many altcoins—tokens such as PEPE, IP, and WLFI have surged by over 20% in the past three days.

Of course, the time period is still short, and it remains uncertain whether the "copycat season at the beginning of the year," as seen in previous years, will happen again. However, under the complex and intricate macro-political and economic conditions, whether cryptocurrencies can, as usual, take over from precious metals to stage a "price surge miracle," is already something to look forward to. Odaily Planet Daily will provide a brief review and analysis of the current market conditions and representative viewpoints in this article.

Beyond the overall market trend, based on the current data, it is difficult to conclude that the "altcoin season has returned." Looking at the top gainers on exchanges, many of the tokens currently rebounding are either previously oversold assets, highly controlled "hype coins," long-standing meme coins, or coins tied to specific hot topics. From the following three key data points, the crypto market is still in a slow "price recovery phase."

Indicator One: The overall market value of cryptocurrencies has yet to show a significant recovery.

According to CoinGecko dataCurrently, the total market capitalization of the cryptocurrency market is $3.19 trillion, of which BTC has a market share of 57% and ETH has a market share of 11.9%.

The market cap is still over $1 trillion away from its previous all-time high of over $4.3 trillion. While the significant declines of major cryptocurrencies like BTC, ETH, SOL, and BNB from their highs are certainly a contributing factor, it is also an undeniable fact that many altcoins are experiencing lower prices and reduced trading activity amid shrinking liquidity and continuous outflows of capital from the market.

As can be seen, the overall environment of the cryptocurrency market has not improved much.

Indicator Two: The "Shanzhai" Season Index Remains at a Low Level

According to Coinglass Memecoin Season IndexCurrently, the market altcoin season index stands at 39, which is within the same range as the market index in mid-July last year. At that time, the market was on the eve of the DAT financial scandal, and both major cryptocurrencies and altcoins were at relatively low levels. Of course, in the following period, as the number of DAT-related listed companies continued to expand, ETH was the first to reach a new high. However, compared to the influx of new buying pressure from those listed companies at that time, the market's liquidity has now shrunk to a certain extent.

Indicator Three: Market sentiment remains in the fear zone.

According to Coinglass Website InformationThe current fear and greed index for the cryptocurrency market is at 26, which falls within the fear zone. This zone represents the stage with the largest proportion of market sentiment, accounting for as high as 30.86% of the overall time, and aligns well with a bearish market sentiment.

Taking all the above indicators into account, the market is still in a sluggish phase. But does this mean there are no opportunities for wealth creation? The mainstream market view clearly does not agree. On the contrary, many institutions and individuals have pointed out that the current situation may present a good opportunity to buy at a low price. The main supporting logic behind this view is the expectation of improved liquidity and positive developments in the macroeconomic and geopolitical environment.As the saying goes, be greedy when others are fearful. Of course, the prerequisite is choosing the right target.

Currently, the mainstream market view shows a certain consensus regarding a short-term bottoming and rebound. However, a true turning point may depend on increased market liquidity, BTC's market performance, and a shift in retail investor sentiment. Below is an overview of the representative market views at present:

Global market liquidity may rebound next week, with short-term rebounds driven by in-market positioning battles.

Jens Naervig Pedersen, foreign exchange and interest rate strategist at Dansk Bank indicated in the reportGlobal market liquidity is expected to remain light this week, but may pick up next week as more economic data is released.During the year-end period, many market participants are on vacation or closing out positions, which typically leads to lower market liquidity.

The key data points next week include important U.S. labor market data, such as the December Nonfarm Payrolls report and the ISM survey, which will be released on January 9th.

CoinKarma, on the other hand,Expressing through a postCurrently, the cryptocurrency market has returned to an on-chain trading phase, where on-chain factors have become key to determining short-term price movements. In the absence of clear external incremental capital inflows, the crypto market primarily relies on internal capital circulation. Short-term price fluctuations mainly stem from changes in the flow of on-chain funds and overall liquidity.

In addition, by observing the USDC/USDT Premium (a measure of the premium or discount of USDC relative to USDT) and the Overall LIQ (an overall market-weighted liquidity indicator), it can be seen that when the USDC/USDT Premium turns positive, it reflects a weakening of active selling behavior by dominant capital in the BTC/USDT pair.Currently, the USDC/USDT premium is resonating again with the overall LIQ (Liquidity), indicating a high probability of forming a short-term bottom and rebound. CoinKarma also points out that compared to the previous phase, the medium- to long-term trend remains bearish at present, and potential selling pressure should be closely monitored.

Precious metal prices are correcting, BTC may take over the upward trend.

After gold and silver experienced another surge to new highs last month, many market participants and analysts have started to view cryptocurrencies, including BTC, as potential successors to take over liquidity following a price correction in these precious metals.

Daniel Ghali, Senior Commodity Strategist at TD Securities ExpressIt is expected that within the next two weeks, up to 13% of the total open interest in the COMEX silver market at the New York Mercantile Exchange will be liquidated, which could lead to a significant price reassessment and decline. Additionally, the low liquidity after the holiday period may amplify price volatility.

Delphi Digital then issued a statement sayingGold prices have risen by 120% since the beginning of 2024, achieving one of the strongest increases in history,Since gold historically leads Bitcoin by about three months at liquidity inflection points, this trend is instructive for cryptocurrencies.Currently, gold has already repriced the accommodative monetary cycle, while Bitcoin sentiment is still affected by previous cycle simulations and recent pullbacks. The performance of precious metal assets is signaling policy easing and fiscal dominance.When precious metals outperform stocks, the market is likely pricing in concerns about currency depreciation rather than a growth collapse. Volatility in the precious metals market could serve as an indicator of the future direction of other risky assets.

"10·11 Insider Whale" Agent Garrett Jin Expressed the same sentiment in a post.As previously analyzed, the prices of gold and silver have already peaked.After the U.S. market opened today, capital has already started shifting toward the cryptocurrency market. Despite a sell-off in the stock market after its opening, cryptocurrencies have continued to rise. The inflow of funds may persist, accelerating the upward momentum and potentially triggering a short squeeze without a pullback.

Retail Investor Sentiment to Become a Key Indicator of Market Changes

Blockchain analytics platform Santiment analyst Brian Quinlivan noted that sentiment among cryptocurrency market participants on social media has been strong at the beginning of the year. However, he also warned that whether the market can continue to rise further depends on whether retail investors can remain rational. He said, "Santiment's social media data shows that current retail sentiment is very positive," he said. "This is usually a bit concerning, but this time it might just be a normal rebound following the holidays."

Quinlivan said he is not overly concerned about a "surge in FOMO (fear of missing out) sentiment," but added that such sentiment could flood the market if bitcoin quickly rises to $92,000. When market excitement becomes too high, the cryptocurrency market often moves in the opposite direction of what most people expect.

From the current market conditions, the current ETF trading attitude remains cautious, in stark contrast to the optimistic sentiment of on-exchange funds in the cryptocurrency market.

BTC ETFs saw net outflows of over $900 million in the past 3 weeks.

Yesterday, the price of Bitcoin rose above $90,000 today, reaching a three-week high. However, the flow of funds into derivatives and spot ETFs indicates that traders remain cautious, suggesting limited confidence in further price increases.Data shows thatDespite the price rebound, demand for Bitcoin leveraged long positions has remained stable, with the Bitcoin futures basis rate below the neutral threshold, currently showing an annualized premium of 4%. Since December 15, Bitcoin spot ETFs have recorded over $900 million in net outflows. Additionally, Bitcoin put options traded at a premium on Saturday, indicating increased demand from professional traders for downside risk protection.

DOGE and PEPE drive a broad rally in meme coins, while IP, ZEC, and WLFI lead the rebound in oversold sectors.

Recently, Dogecoin and PEPE led a surge in Meme coins at the beginning of the year,Some analysis suggests that...Momentum traders are chasing a familiar pattern: once liquidity returns, speculative funds flow from large-cap cryptocurrencies into meme coins. Currently, major meme coins are experiencing widespread price increases, including PEPE, DOGE, SHIB, WIF, FLOKI, and others.

"Hot concept" tokens such as IP, ZEC, and WLFI, which had experienced significant declines previously, have rebounded after the start of the year, driven by related news and market fundamentals.

In AI-related token trading, tokens such as RENDER and PIPPIN remain active, with both spot and futures trading showing a remarkable increase of over 15%.

Based on the current information, the biggest variables for the cryptocurrency market still focus on this month's macroeconomic data and Trump's nomination for the new Federal Reserve chair. Before these events, it's okay to look for buying opportunities, but try to focus on short-term trades and avoid getting overly excited or overconfident.

Finally, we will conclude this article with the existing BTC price oracle, as well as our anticipation for a rise this year.

The Great Public Newspaper published an article titled "Speculative Attributes Fading, Bitcoin Volatility Stabilizing,"which points out thatThe surge in Bitcoin in 2025 is different from previous years, with the core reason being the widespread adoption of ETFs. Recently, the price correction has not been as significant as in the past four to five years. This change might be related to the influence of macroeconomic factors on traditional capital operation logic. Regarding Bitcoin's price outlook for 2026, there are two main views in the market. One camp believes Bitcoin may experience a significant pullback, possibly even returning to a lower price range. The other group of investors is optimistic, expecting Bitcoin to reach $150,000 by the end of 2026 and potentially $250,000 by 2027.

Forbes published an article titled "Bitcoin 2026 Price Prediction."which points out thatCurrently, the publicly available price forecasts for Bitcoin in 2026 vary widely. Analysts from Tom Lee, Standard Chartered Bank, and Bernstein are all bullish, while some institutions remain bearish. Although the market has not yet converged on a single price target for Bitcoin, most predictions cluster between $120,000 and $170,000. This suggests that Bitcoin's price discovery is increasingly influenced by structural factors such as ETF fund flows and corporate treasury assets. If macroeconomic positives strengthen and institutional participation accelerates, the potential upside could reach $250,000 or higher. How institutions choose to deploy their capital will become a key factor in Bitcoin's price movement.