Published: Wednesday, January 7, 2026 · 5:32 PM | Updated: Wednesday, January 7, 2026 · 5:32 PM
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🗝️ Key Points
- Bitcoin (BTC-USD) hovered near $91,500 on Wednesday as Wall Street grew cautiously optimistic about the token's potential for a strong rally in 2026.
- "Crypto markets are entering 2026 with stronger footing, where many of 2025's headwinds are starting to subside," Compass Point analyst Ed Engel wrote in a Wednesday note.
- Heavy selling from long-term holders and massive deleveraging last quarter sent prices plummeting more than 30% from their October high of about $126,000.
Bitcoin (BTC-USD) hovered near $91,500 on Wednesday as Wall Street grew cautiously optimistic about the token’s potential for a strong rally in 2026.
“Crypto markets are entering 2026 with stronger footing, where many of 2025’s headwinds are starting to subside,” Compass Point analyst Ed Engel wrote in a Wednesday note.
Heavy selling from long-term holders and massive deleveraging last quarter sent prices plummeting more than 30% from their October high of about $126,000.
After three straight months of losses, market technicals now point to a more favorable setup.
Engel highlights that speculative excess has faded since the Oct. 10 unwinding, at the same time that selling from long-term holders has slowed and fallen back to June levels.
Institutional demand is expected to be the key catalyst driving prices higher as spot exchange trade funds (ETFs) inflows tick higher.
“When HODLers’ [long-term holders] cyclical selling eventually stops, we believe institutional buying can power BTC back to record highs,” Engel added.
Read more: What is bitcoin, and how does it work?
Strategists have increasingly pointed to a January bounce and an emerging bullish trend, with some even declaring that the bottom for bitcoin and the broader crypto market is already in.
Still, Engel remains cautious in the near term, noting that the token has been unable to break above $95,000 in recent days.
Prices are also well below the $98,800 cost basis of buyers who entered the market less than six months ago.
“Until these levels are breached, we remain cautious on chasing near-term rallies; however, breaking above $95–99K would make us very constructive toward a strong rally in 2026,” Engel said.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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