Inauguration Day: The Real Reset

Markets don't lie. Bitcoin rallied to $97,000+ in mid-January on massive ETF inflows ($760M in a single day), then pulled back into consolidation around $91K-$95K as inauguration week brought geopolitical noise and profit-taking. The euphoria of "buy the rumor, sell the news" played out exactly as the smart money expected.

But here's what most missed: 2026 isn't about the inauguration premium anymore. It's about the regulatory rails being laid underneath.

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📰 Last Week Recap

  • Bitcoin hit $97K+ on January 14th - highest level in 3 months - driven by $760M single-day ETF inflows (Fidelity's FBTC alone: $351M)

  • Pulled back to $91K-$95K consolidation range as geopolitical tensions around Greenland rattled risk assets on MLK Day

  • Bollinger Bands squeeze: Compressed to under $3,500 range - tightest since July 2025, signaling imminent volatility breakout

  • Golden cross confirmed: 50-day EMA crossed above 200-day EMA in early January - historically bullish momentum signal

  • Current trading: ~$91,278 with support cluster at $88K-$90K, resistance at $94.5K-$97K

  • Positive CPI data (December inflation at 2.7%, core at 2.6% - below expectations) helped fuel the rally

  • ETH held $3,100-$3,300 range, showing relative strength versus BTC with no signs of major breakdown

  • XRP maintained $1.88-$2.06 levels after flipping BNB to #3 market cap position earlier this month

  • Open interest plummeted 30% from $15B in October to $10B - overleveraged traders got flushed out (historically a major bottom signal)

  • Fear & Greed Index dipped below 20 multiple times, signaling extreme retail capitulation

  • SEC's new Crypto 2.0 task force announced under Commissioner Hester Peirce - shift from enforcement to framework development

  • FDIC acting chairman Travis Hill issued statement reversing "pause letters" on crypto banking relationships

  • Senate Banking Committee confirmed January markup sessions for CLARITY Act - market structure legislation targeting Q1-Q2 passage

  • GameFi sector led downturn with -8.58% decline; ImmutableX, SAND, and GALA posted double-digit losses

  • Precious metals hit record highs as some capital rotated from gold/silver positions into crypto

  • Stablecoin market cap crossed $300B milestone with GENIUS Act implementation timeline on track for July 2026

📅 This Week to Watch

  • Tuesday 1/21: Markets reopen after MLK Day - watch for ETF flow direction

  • Wednesday 1/22: FOMC minutes release - rate cut expectations in focus

  • Thursday 1/23: Initial jobless claims

  • Friday 1/24: Key options expiry could trigger volatility

  • Senate Banking markup sessions expected mid-week on CLARITY Act

Weekly Market Signal: 🟡 Neutral-to-Bullish (Coiling Spring)

⚠️ Bias: Consolidation after $97K rally signals healthy base-building, not weakness. Bollinger Bands squeeze (tightest since July 2025) indicates imminent volatility breakout in either direction.

Golden cross + institutional absorption of 105% of new BTC issuance = structurally bullish. Short-term: needs decisive break above $94.5K to confirm next leg up or breakdown below $90K to test $85K-$88K support zone.

The beach ball is being held underwater. Acceptance, security, and institutional infrastructure are at all-time highs while price consolidates after the $97K spike. This isn't distribution - it's compression before expansion.

Fear & Greed Index: 🔴 Extreme Fear (Sub-20)

When retail capitulates, institutions accumulate. We've seen this movie before.

BTC | ETH | SOL

Weekly Price Action

Bitcoin (~$91.3K - $95K range)

  • Recent action: Rallied from $85K-$90K consolidation to $97K+ (Jan 14), now consolidating $91K-$95K

  • Bollinger Bands squeeze: Under $3,500 compression - historically precedes major breakouts (last seen July 2025)

  • Golden cross active: 50-day EMA > 200-day EMA - bullish medium-term structure intact

  • Key resistance: $94.5K-$97K (break above confirms continuation to $100K+)

  • Critical support: $88K-$90K (720-day MA at $86K provides long-term floor)

  • RSI: 51.90 - neutral zone, compressed volatility, market in equilibrium

  • Trading volume: Steady institutional participation despite consolidation

  • Macro setup: Building a base for 2026 run on regulatory clarity + ETF inflows, not just hype

  • Risk: Daily close below $90K could trigger ETF selling pressure, testing $85K-$88K

Ethereum ($3,192)

  • Held $3K structural level despite BTC weakness

  • No relative weakness vs BTC = reduced downside risk

  • DeFi and RWA tokenization narratives building momentum

  • Stablecoin settlement layer positioning intact

  • Watch $3,100 support; break could lead to $2,900-$3,000 retest

Solana ($133)

  • Down -6.7% week-over-week but holding above $130

  • Revenue approaching $3B annually (per 21Shares research)

  • Institutional adoption expanding: spot ETF approved late 2025

  • Real blockchain activity, not a ghost chain

  • Key level: $122-$125 support zone

The Regulatory Catalyst Everyone's Missing

Let me be crystal clear: The January 2026 inauguration wasn't the trade. The July 2026 implementation deadlines are.

While traders obsessed over Trump taking office, the real game changed in the background:

GENIUS Act Timeline:

  • Regulators must issue final implementation rules by July 18, 2026

  • Stablecoin framework goes live either January 2027 OR 120 days after final regs

  • Banks now have clear pathways to issue dollar-backed stablecoins through FDIC-supervised subsidiaries

  • This isn't theory anymore - it's a published compliance roadmap

CLARITY Act Progress:

  • Senate Banking markup sessions confirmed for January 2026

  • House already passed in July 2025 with bipartisan support

  • 50-60% probability of passage before November midterms

  • Ends the SEC-CFTC turf war, defining BTC as commodity under CFTC jurisdiction

  • When firms know which regulator applies to which asset, institutional capital flows freely

CFTC Leadership:

  • Michael Selig confirmed December 18, 2025 (53-43 vote)

  • "Crypto sprint" runs through August 2026

  • Focus: spot crypto trading, tokenized collateral, blockchain integration in traditional markets

  • Selig expected to "open the floodgates" for Bitcoin derivatives expansion

Banking Relationships Restored:

  • FDIC acting chairman Travis Hill reversed "pause letters" to 20+ banks

  • Federal Reserve and OCC easing restrictions on crypto banking access

  • This was the invisible wall blocking institutional on-ramps - it just came down

State Bitcoin Reserves Scaling:

  • Texas holds $5M in BlackRock Bitcoin ETF, planning additional $5M direct BTC purchase

  • Arizona and New Hampshire legislation signed into law in 2025

  • 10-15 states potentially allocating $50-200M each through 2026

  • Validates Bitcoin as sovereign infrastructure, not speculative asset

What This Means for Your Portfolio

The market is mispricing 2026. Period.

Bitcoin ending 2025 flat (-6%) while institutional rails got built was not a failure - it was foundation-laying. ETF inflows hit $23B in 2025. Forecasts for 2026 range from $15B (conservative) to $50B+ (bullish scenario).

Here's the trade setup:

  1. Current consolidation: $91K-$95K = Bollinger Bands squeeze before breakout (watch for volume spike)

  2. Break above $94.5K-$97K = Continuation confirmed, targeting $100K-$105K

  3. Support defense at $88K-$90K = Healthy accumulation zone before regulatory catalysts hit

  4. ETH $3,100-$3,300 range = Coiled spring for DeFi/RWA tokenization explosion

  5. Altcoins 2-4x potential if market structure legislation passes (XRP, SOL leading)

Risk management:

  • Stop loss: BTC daily close below $88K invalidates bullish structure (could test $85K)

  • Breakout trigger: Sustained close above $94.5K on volume = long entry confirmation

  • Position sizing: Don't go all-in - consolidation could extend before the rip

  • Watch geopolitical headlines - Greenland tensions, tariffs create short-term noise but don't change structural setup

Institutional forecasts diverge wildly:

  • JPMorgan: $170K BTC by year-end 2026

  • Standard Chartered: $150K

  • Tom Lee (Fundstrat): $150K-$200K early 2026, $250K by year-end

  • Options markets: equal odds of $70K OR $130K by mid-2026 (massive vol band)

Altcoin Spotlight 🔦 - Stablecoins (The Quiet Giant)

TLDR:

  1. Stablecoins crossed $300B market cap and account for 30%+ of on-chain transactions

  2. GENIUS Act creates the first federal framework for dollar-backed stablecoins - this is bigger than most realize

  3. Banks, payment processors, and fintechs are now building stablecoin issuance infrastructure under clear regulatory oversight

Why This Matters

Think of stablecoins as the "pipes" of the new financial system. Every major tokenization project, every DeFi protocol, every cross-border payment runs on stablecoins. The GENIUS Act didn't just regulate them - it legitimized them as core financial infrastructure.

Goldman Sachs survey data: 35% of institutions cite regulatory uncertainty as the biggest adoption hurdle. GENIUS Act removes that blocker.

What's being built right now:

  • Circle's Arc Layer-1: Enterprise-focused blockchain for regulated payments, FX, and tokenized markets using USDC

  • Tether-aligned Stable: $28M funding round, using USDT as native gas token to cut fee volatility

  • Bank-issued stablecoins: FDIC proposal published Dec 2025 on how supervised institutions can issue through subsidiaries

The catalyst timeline:

  • Regulators must finalize GENIUS Act implementation regs by July 18, 2026

  • Stablecoin market projected to exceed $1 trillion by late 2026 (21Shares forecast)

  • This positions dollar-backed stablecoins as the global settlement layer for digital finance

When stablecoins hit $1T market cap with clear regulatory frameworks, the infrastructure underneath (L1s, DeFi protocols, tokenization platforms) scales with it.

Investment angle:

  • Direct exposure: USDC, USDT remain dominant but watch for new regulated issuers

  • Indirect exposure: SOL (Arc built on Solana), ETH (DeFi settlement layer), LINK (oracle infrastructure connecting stablecoins to real-world data)

The Week Ahead: What to Watch

Short-term (next 7 days):

  • Breakout watch: Bollinger Bands squeeze historically resolves within days-to-weeks with violent moves

  • BTC breaking and holding above $94.5K-$97K = continuation to $100K+ confirmed

  • BTC breaking below $90K = potential retest of $85K-$88K support before next leg

  • FOMC minutes Wednesday - dovish surprises could trigger breakout, hawkish could extend consolidation

  • Senate Banking markup sessions - CLARITY Act progress is the real medium-term catalyst

Medium-term (Q1 2026):

  • CLARITY Act passage probability: 50-60% before midterms

  • State Bitcoin reserve announcements (Texas direct BTC purchase expected)

  • Stablecoin implementation rulemaking from Treasury Department

Long-term (2026 full year):

  • GENIUS Act goes live (Jan 2027 or 120 days post-final regs)

  • CFTC crypto sprint completes (August 2026)

  • ETF inflows potentially hitting $50B+ if regulatory clarity accelerates

  • Bitcoin targets: $150K-$250K if fundamentals play out

Final Take

Bitcoin hit $97K two weeks ago on the back of $760M in single-day ETF inflows and positive inflation data. Now it's consolidating in the $91K-$95K range with the tightest Bollinger Bands compression since July 2025.

This isn't weakness. This is a coiled spring.

The Bollinger Bands squeeze, golden cross confirmation, and institutional absorption of 105% of new BTC issuance tell the real story. When this consolidation breaks - and it will - the move will be violent.

We traded short-term hype for long-term infrastructure. The regulatory framework being built in 2026 will unlock institutional capital that makes 2025's $23B in ETF inflows look like a warmup.

The beach ball is still underwater. When the squeeze resolves to the upside, price catches up to fundamentals fast. Watch $94.5K for breakout confirmation, defend $88K-$90K as the line in the sand.

Stay patient. Stay positioned. The next leg isn't built on Twitter hype - it's built on Senate markup sessions, GENIUS Act implementation deadlines, and ETF flows that haven't even started yet.

The consolidation phase is the opportunity. The breakout is the reward.

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