Liquidity becomes more stagnant at the end of the year, Bitcoin price faces range-bound testing

According to the latest data from market maker Wintermute in the crypto market, as mid-January 2026 approaches, the crypto market is exhibiting a unique “calm period” characteristic. After recent wide fluctuations, Bitcoin prices are gradually stabilizing around $90,000, while Ethereum continues to oscillate above $3,000. The formation of this market pattern reflects the deeper logic of liquidity contraction and the withdrawal of risk capital.

BTC and ETH Both Retrace, Liquidation Wave Reveals Leverage Capital Exit

In the past week, the crypto market experienced significant liquidation events, with closed positions exceeding $2 billion, marking a substantial reduction in excessive leverage. Bitcoin once dipped to the support level of $85,000 but then gradually rebounded supported by institutional and rational traders. During this rapid liquidation process, mainstream coins showed stronger resilience—BTC and ETH received continuous buying support, while smaller tokens generally fell deeper due to dense unlocking schedules and profit-taking pressure.

Looking at the 7-day price change data, Bitcoin declined by 6.61%, and Ethereum by 8.75%, reflecting some adjustment pressure even among mainstream coins. However, compared to smaller tokens, these declines are relatively moderate.

Institutional and Retail Divergence, Funds Concentrate in Mainstream Coins

Since last summer, institutional funds have continuously flowed into the crypto market, a trend that is particularly evident in the current market structure. Meanwhile, retail funds have also shown a “prefer the best” phenomenon—gradually shifting from high-risk small tokens to leading assets like BTC and ETH. This divergence in capital flow actually reflects a rational return of the entire market: during periods of rising uncertainty, funds naturally tend to concentrate in more liquid and credit-backed assets.

Bitcoin, as the market’s benchmark asset, has maintained its dominant position throughout this process. This is not only reflected in price performance but also in the reallocation of capital weights.

Year-End Holidays Approaching, Bitcoin Price May Continue Range Volatility

The overall market liquidity shows a clear calm state, which is partly related to the reduction of leverage after the liquidation wave, and also closely linked to the approaching year-end holidays and decreased trading participation. In this context, Bitcoin’s price may continue to oscillate within a range, lacking a clear breakout direction.

However, it is worth noting that the continued entry of traditional financial institutions provides “underlying support” for the market. Although short-term volatility remains intense, the medium- to long-term capital situation is gradually improving. After the year-end holidays, as market activity resumes and a new round of institutional capital deployment occurs, Bitcoin’s price may迎来新的方向性机会. Before that, range-bound consolidation may become the main theme of the market.