Analysts Predict a Crypto Comeback in Early 2026

In a promising update, Coinbase analysts suggest that the crypto market is on track for a recovery in early 2026. They noted that following the December sell-off, the market has reset itself, signaling a potential relief bounce in the first quarter of 2026.

Key Takeaways

Analysts from Coinbase foresee a recovery in the crypto market starting early 2026.
Systemic leverage has decreased to 3% of the total crypto market cap, down from 10% in 2025, which is beneficial for sustainable growth.
Increased inflows in Bitcoin (BTC) and Ethereum (ETH) ETFs indicate a growing market interest.
On-chain analysis shows a significant drop in selling pressure, suggesting a favorable environment for price recovery.
Improved liquidity conditions mirror those that sparked past rallies, particularly in 2020.

Crypto Bitcoin

Coinbase further emphasized that there has been a resurgence in inflows for Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs), along with positive options data that suggest a “rising appetite for upside exposure.” They pointed out that liquidity is returning after the holidays, and early flows indicate institutions are beginning to cautiously re-enter the market.

Coinbase flags early 2026 crypto recovery after leverage reset

Could 2020's Liquidity Surge Spark Another Rally?

The optimism is echoed by on-chain analysis firm Glassnode, which reported an 82% decrease in selling pressure. The average daily profit-taking surged above $1 billion in late 2025, but this has now dropped to $183 million in early 2026—signaling a favorable setup for a potential rebound.

James Easton, an analyst, noted that the Federal Reserve’s balance sheet has turned positive for the first time since 2023, indicating improved liquidity.

Bitcoin

This enhanced liquidity reflects the conditions that led to the explosive BTC rally of 2020. Moreover, President Donald Trump’s recent announcement to inject $200 billion into mortgage bonds is perceived as additional liquidity into the market, benefiting Bitcoin. JPMorgan has also shared a bullish perspective regarding liquidity and overall market performance for 2026.

Bitcoin

BitMEX founder Arthur Hayes described these developments as key catalysts that could potentially drive Bitcoin to reach $1 million per coin.

What Do Bitfinex Longs Indicate?

Another factor supporting the bullish sentiment for Bitcoin is the behavior of Bitfinex longs, or whale positions. Historically, whales on the Bitfinex exchange would increase their long positions during market dips and reduce them when the market rallied. This pattern has closely mirrored past Bitcoin price movements. The last time Bitfinex longs reduced their positions, Bitcoin's price surged by 35%.

Bitcoin crypto

A robust increase in Bitcoin's price could also positively impact the altcoin market, which has started to see gains in early January. At the time of writing, Bitcoin was trading at $91,000, with anticipation building ahead of upcoming inflation data and crypto legislation discussions.

Conclusion

As we move into 2026, analysts are hopeful that the factors at play will contribute to a significant recovery in the crypto market, with many indicators suggesting that the environment is ripe for a potential rally.