The January Effect and ETF Inflows

Snyder highlights that January has historically been a favorable month for Bitcoin, often marked by renewed investor activity. Many market participants rebalance their portfolios at the beginning of the year, which typically results in fresh inflows into Bitcoin exchange-traded funds. This pattern contributed to the asset’s powerful rally in early 2025. Yet the currently subdued sentiment raises questions about whether the same dynamic will unfold in early 2026.

Bitcoin climbed to 109,000 dollars in early 2025, driven in part by geopolitical expectations. It later set a new high of 125,100 dollars in October. However, the substantial 19 billion dollar liquidation event on October 10 triggered a sharp downturn and shifted short-term expectations considerably. At the moment, Bitcoin is trading near 92,150 dollars.

A Correction Driven by Global Market Stress

Snyder emphasizes that the recent pullback should not be viewed as a crypto-specific setback. She describes it as a reaction to a broader risk-off environment affecting global financial markets. For that reason, she sees the correction as part of a larger macro adjustment rather than a sign of structural weakness within the crypto ecosystem. This perspective informs her increasingly optimistic long-term stance.

Factors That Could Shape Bitcoin’s Next Move

Several elements could support another period of outperformance. Snyder points to the expansion of crypto ETFs, growing interest from governments and institutions, and a rising demand for alternative stores of value beyond gold. Conversely, persistent risk aversion in traditional markets or continued strength in gold could limit Bitcoin’s upward potential.

Still, not all industry voices share the same caution. BitMine chairman Tom Lee recently suggested that Bitcoin could set a new all-time high before January 2026 comes to a close. Historical data also offers some encouragement, with Bitcoin averaging a 3.81% return in January since 2013.

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After a 10% correction from the all-time high of $108,300 on December 17, 2024, Bitcoin is preparing for a new rally.

Ryan Lee, chief analyst at Biget Research, believes that Bitcoin could surpass $120,000 in January, a movement potentially triggered by Donald Trump’s inauguration on January 20. Lee predicts that Bitcoin could exceed $120,000 in the short term, but a correction might follow due to profit-taking. Furthermore, the “January effect” could come into play at the beginning of 2025, with renewed investments and increased market optimism.

To gauge Bitcoin’s performance, investors should monitor spot Bitcoin exchange-traded fund (ETF) inflows, the performance of the US stock market, and the upcoming FTX repayments scheduled for January 3.

Lee’s predictions align with those of other analysts who believe Bitcoin will reclaim six-figure prices in January.

$45 Billion Stablecoin Reserves to Fuel Bitcoin Rally

The anticipated rally in January will benefit from nearly $45 billion worth of stablecoin reserves. Binance’s stablecoin reserves reached $44.5 billion as of December 31, 2024, coming very close to the all-time high of $45.8 billion recorded on December 11. According to CryptoQuant data, these reserves contributed to Bitcoin’s price increase.

On December 11, 2024, Bitcoin saw an over 4.7% intraday rise, closing above $101,000, driven by stablecoin reserves.

An increase in stablecoin inflows into crypto exchanges signals potential buying pressure and rising investor interest, as stablecoins are the primary on-ramp from fiat to the crypto world.

Bitcoin is expected to face significant resistance above $95,000 and $96,400. If it surpasses these levels, it could trigger a $1.24 billion liquidation of leveraged short positions across all exchanges, according to CoinGlass data. A move above $96,400 could result in a major reset.

Bitcoin’s $160K Target for 2025

Bitcoin has high targets for 2025. Some analysts predict the price could reach $160,000, driven by improving US financial policies.

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