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Bitcoin gave up its gains of 2026, falling about 4% in the last 24 hours to about $88,850 on Wednesday morning Asian time.
Bitcoin’s price now sits roughly at the same level it closed at in 2025, snapping a three-week rally that briefly pushed the cryptocurrency above $97,000. At the time of writing, the coin is trying to recover after touching a session low of $87,901.
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A disappointing end to 2025
Close Bitcoin Year 2025 At about $87,000-$88,000, down about 30% from its October high of $126,000 and showing an annual loss of about 6%. December was particularly tough, as the cryptocurrency fell by around 22% in its worst monthly performance since December 2018.
The long awaited “Rally of Santa” never took place. Low holiday liquidity and a lack of new catalysts left the market reeling in the final session of the year. Repeated attempts to recover key resistance levels were met with selling pressure.
New year recovery: easing inflation and hopes for regulation
The mood changed dramatically at the beginning of 2026. On January 14, the Bureau of Labor Statistics published an inflation report showing price stability, which prompted … Bitcoin rises more than 4% Within 24 hours, the $97,000 barrier was breached, a level not seen since mid-November.
A break above the $95,000 level, an area of ​​technical and psychological importance, suggested the upside could continue. Optimism around the Clarity Act, which will establish a comprehensive regulatory framework for digital assets, also supported the positive mood. However, the Senate postponed the vote on the bill until the last week of January, indicating that it has not yet secured the necessary votes.
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Bring back geopolitical risk
On January 21, President Donald Trump promised an attempt to seize Greenland and threatened to impose new tariffs on European allies, sending … Shock waves Across world markets. Benchmark US stock indexes fell more than 2%, the VIX index hit its highest level since November, and the dollar fell against most major currencies.
said Xian Cao at hedge fund Winshore Capital At the Bloomberg Agency The situation “opened the risk of the market glue – that people do not want American assets”, he said, adding that investors must now calculate a political risk premium.
The sell-off mirrored fears of April 2025, when Trump’s broad announcement of new tariffs sparked a sharp drop in US markets and a huge increase in volatility.
Expectations: Volatility will continue
Bitcoin has now completed a full journey, erasing its gains since the beginning of the year and returning to the closing levels of 2025. Expect additional volatility on Wednesday when the Supreme Court hears arguments about Trump’s attempt to fire Federal Reserve Governor Lisa Cook.
An agreement could eventually calm tensions in Greenland, but that could take several months, leaving markets with increased volatility in the meantime.
The cryptocurrency is currently seeing stability above $88,000 as traders assess whether this represents a buying opportunity or the start of a deeper correction.
