The crypto market is off to a great start in 2026

Since the start of the year, over $250 billion has been added to the total crypto market cap.

Bitcoin is up 7%, Ethereum is up 9%. Major alts like

$SOL

and

$XRP

are up double digits. A bunch of memecoins are up over 50%, and the Fear and Greed Index has shifted from “Fear” to “Neutral”.

So what's driving this turnaround?

Here are the main factors that I believe are sparking this current price pump:

1. Tax-Loss Harvesting Is Over

Analysts believe that a lot of US institutional and retail holders were selling their crypto holdings at a loss in December to help reduce their 2025 tax liabilities.

The calendar has flipped, so that sell pressure is gone, and rebound buying is happening.

2. Huge Spot Bitcoin ETF Inflows

January 2nd and 5th saw $471M and $697M in ETF inflows, respectively. And the January 5th inflows were the largest since October 7th.

Inflows have flipped from negative to positive at the calendar turn, in large part due to the tax-loss harvesting issue.

3. Looser Monetary Conditions Coming

President Trump should be announcing his new pick for the Federal Reserve chair this month. All indications show that he’ll select a monetary dove

And the reason is simple: United States' current monetary system is broken. The country's debt just hit a new all-time high of $38.5 trillion, with the debt-to-GDP ratio over 120%.

And usually, the playbook for government in situations like these is to force their central bank to lower interest rates.

Trump wants rates down to 1%, and a dovish Fed Chair gets him there.

4. We're Due For A Rally

The 35% fall from the October ATH to $80K was quick and brutal.

But established assets usually see relief rallies. And right now we’re due for one.

Now whether this is the beginning of a major rally towards new ATHs, or just a small relief bounce, remains to be seen.

5. The Venezuelan Situation

With the US effectively in control of Venezuela, oil should become cheaper. That creates disinflation, which gives the Fed more room to cut rates.

Bottom Line:

The stars are aligning for a favorable start to 2026. Tax selling is behind us, institutional inflows have resumed, and easier money is coming.

Let’s now see if #bitcoin $BTC can break and hold above $94.5K and $100K.