Bitcoin & Ethereum Ignite First Major Crypto Rally of 2026

• Bitcoin surged above $97,000, Ethereum approached $3,400, triggering $700 million in short liquidations.
• U.S. core CPI eased to 2.6%, boosting 2026 rate cut expectations, favoring cryptocurrencies.
• $1.2 billion flowed into crypto ETFs, signaling institutional accumulation amid cautious market sentiment.

Cryptocurrency markets opened 2026 with their first decisive rally, reversing late-2025 weakness. Bitcoin climbed above $97,000 on Wednesday, while Ethereum advanced toward $3,400.

Market​‍​‌‍​‍‌ data showed that the rally had extended beyond the majors. Solana recovered to $148 from the beginning of January lows, while several altcoins recorded weekly gains. Analysts highlighted Bitcoin’s breakout above the $95,000 resistance level, which reportedly caused nearly $700 million in short liquidations, thus accelerating the momentum and sending bullish technical signals across derivatives markets globally worldwide.

Both Bitcoin and Ethereum had a strong start to 2026, but when Bitcoin pauses after a rally, capital often flows to the next promising asset. At the moment, Ethereum is likely the most attractive altcoin ​‍​‌‍​‍‌opportunity.

Bitcoin Strengthened as Rate Cut Expectations Rise

Macroeconomic​‍​‌‍​‍‌ indicators gave further weight to the situation. The most recent Consumer Price Index in the U.S. revealed a decline in inflation, with core CPI down to 2.6%. The monthly headline and core figures staying at 0.3% have thus further cemented the market’s anticipation of 2026 rate cuts, which in the past have been beneficial to risk assets, including cryptocurrencies, in the global financial markets this year.

According to Coinglass data, there were net inflows of about $1.2 billion into cryptocurrency exchange-traded funds during the last five trading days. The steady demand for ETFs indicated that larger investors were accumulating, thus reinforcing the market stability that followed the volatility witnessed at the end of 2025 due to the prolonged risk-off conditions in the digital asset ​‍​‌‍​‍‌markets.

Also Read | Bitcoin (BTC) Faces Rejection as Short-Term Holder Metrics Signal Profit-Taking

Regulatory Developments Temper Short-Term Momentum

Optimism around progress on the Digital Asset Market Clarity Act of 2025 faded after debate intensified. The Senate Banking Committee delayed a markup vote following criticism from industry leaders, introducing renewed uncertainty around oversight, token issuance, and decentralized finance provisions affecting short-term market confidence levels.

Looking ahead, markets remain data-dependent. Progress on U.S. legislation, upcoming inflation and labor reports, and guidance on interest rates represent key catalysts. The Crypto Fear and Greed Index has recovered to 54, reflecting improving sentiment, though neutral readings suggest investors remain cautious after recent volatility across global cryptocurrency trading environments.

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