The recovery of Bitcoin (BTC) in early 2026 may not last long, as new data indicates ongoing pressure for selling could continue to rise. Therefore, traders holding long positions may need to consider the opposite scenario to manage risk
On-chain data shows that Bitcoin whales are increasing their activity on exchange boards, a behavior considered especially risky in a low trading volume market environment.
The proportion of Bitcoin whale inflows into the market surged in January.
One of the most concerning signals is the All Exchanges Whale Ratio (EMA14), which has surged to its highest level in ten months.
This indicator represents the ratio of the top 10 inflows compared to total inflows on the exchange board; a high value indicates that whales are heavily utilizing the exchange board.
Although Bitcoin reserves on exchange boards continue to decline due to demand from DATs and ETFs, the rapid increase in this ratio may serve as an early warning sign and also suggests that BTC holdings on exchange boards could rise again.
This event occurred alongside Bitcoin's attempt to recover after a period of consolidation, so this pattern reflects the strategy of whales using buy-side liquidity to profit and using the current market as an exit point by leveraging this liquidity. CryptoOnchain, an analyst from CryptoQuant, commented.
Meanwhile, the increasingly fragile market liquidity is increasing the risk of sharp price swings and higher volatility.
Referencing data from a Glassnode post on X, Bitcoin and altcoin spot trading volumes have declined to their lowest levels since November 2023.
This weakening demand stands in stark contrast to the recent market rally, further highlighting the increasingly thin liquidity behind the recent price strength, as reported by Glassnode.
In low-liquidity conditions, even limited buying pressure can push prices higher, and conversely, moderate selling pressure can easily trigger a significant downturn.
Therefore, if the exchange-based whales begin selling as predicted, with thin liquidity entering the scene and combined with this situation, the Bitcoin rally exceeding 6% and the 10% recovery in the overall altcoin market value may soon come to an end.
Additionally, analyst Willy Woo also mentioned the significant drop in Bitcoin transaction fees, explaining that the market has become like a ghost town.
Furthermore, charts tracking the mempool and transaction fees both show that blockchain activity is at an all-time low, with both indicators rapidly declining, reflecting a shrinking number of transactions. Reduced blockchain activity indicates weaker capital inflows and outflows, resulting in a less active market than before.
Woo forecasts a potential short-term rally in January when liquidity reaches its lowest point in the short term. However, the long-term trend remains bearish due to the lack of genuine market activity.
In the short term, some analysts predict Bitcoin may adjust down to the USD90,000 and USD88,500 zones, levels consistent with the newly formed CME gap.