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Review and Analysis of Bitcoin Market in January 2026

At the beginning of the new year 2026, Bitcoin started with a strong rally, sparking endless speculation, reaching close to $98,000. $100,000 seemed just a matter of time. Unexpectedly, an "unsuccessful" US-European trade war sharply pushed the Bitcoin price down to $90,000, once again reminding us of the true nature of the Bitcoin bear market. Next, let's analyze the current Bitcoin trend and the underlying capital movements.

I. Technical Support and Resistance

Technical analysis shows that Bitcoin traded at $93,054.98 on January 20, above the 20-day moving average of $92,378.26, initially confirming a bullish signal. The Bollinger Bands indicate that Bitcoin's trading range is between $87,457.49 (lower support) and $97,299.03 (upper resistance). The current price is in the lower half of the Bollinger Bands, indicating downward momentum. Key resistance levels include $93,000 and $91,000, while support is concentrated around $87,000. If Bitcoin holds above $87,000, the short-term rebound structure remains valid.

II. Market Sentiment and Institutional Participation

2.1 Fear and Greed Index Fluctuations

The Fear and Greed Index's sharp fluctuations in January reflect rapid changes in market sentiment. On January 7, the index was at 62 (greed), with Bitcoin at $97,000; on January 12, it dropped to 25 (extreme fear), with Bitcoin at $91,000; on January 14, it rebounded to 47 (neutral), with Bitcoin at $95,000.

2.2 Cautious Attitude of Institutional Investors

Despite Bitcoin reaching recent highs in January, institutional participation remains cautious. On-chain data shows that institutional demand remains prudent, with treasury funds stabilizing near the zero line, and activity mainly through sporadic transactions. Derivatives market trading is light, with shrinking futures volume and limited leverage, creating a low-liquidity environment. This restraint reflects institutional risk assessment: when prices approach the $98,000 region, recent buyers' cost basis near this level creates active "break-even" selling pressure.

III. Market Structure and Capital Flows

3.1 US Market Premium Inversion Phenomenon

Bitcoin's rally in January contrasts sharply with the US market's premium inversion phenomenon. Coinbase's premium index has been persistently negative, indicating cautious sentiment among US institutions and retail investors. This premium inversion suggests that selling pressure in the US has not been fully released and may even indicate potential capital outflows. Historically, strong US demand has been a core driver of Bitcoin's multiple all-time highs, but early 2026, this engine seems to be experiencing a phase shift or weakening.

3.2 Capital Inflows and ETF Compliance

Bitcoin spot ETF capital inflows in January reached the highest level of 2026, with institutional investors continuing to increase holdings. ETF compliance has accelerated traditional capital entry, and changes in supply-demand structure have driven Bitcoin higher. However, derivatives data suggest investor sentiment remains cautious; on January 20, market participation was still low, and the current price movement is more driven by "reduced selling pressure" rather than "active buying." On-chain data continues to reveal oversupply and fragile structural support; although spot capital flows have improved, they have not yet translated into sustained buying trends.