Market Structural Shift in 2026: Risks and Opportunities Seen from Liquidity Contraction and the Christmas Market

Understanding the Current State of the Cryptocurrency Market

Looking at the overall market capitalization, the total cryptocurrency market cap currently reaches $2.95 trillion. Bitcoin’s market share stands at 56.46%, approximately $1.74 trillion, while Ethereum remains steady, supporting these virtual currencies.

The stablecoin circulation market is also a key indicator, with a market cap of $318.4 billion. However, a 0.28% contraction over the past 7 days indicates ongoing weekly negative growth. USDT maintains a dominant position with 60.54% of the market, but an overall decline in liquidity is evident.

Volatility and Capital Flows of Major Coins

Over the past 7 days, Bitcoin has risen by 1.52%, trading around $92.78K. Ethereum has increased by 2.13%, reaching approximately $3.20K, while Solana has decreased by 5.59% to $133.45. Despite some bearish signals across the market, sector disparities are widening, with Humanity Token surging by 19.75%.

In terms of capital flows, there has been a net outflow of $589 million from US-based Bitcoin spot ETFs, and $80.3 million has been withdrawn from Ethereum spot ETFs. The cautious stance of institutional investors is further increasing market fragility.

The Market’s Fragility Revealed by the Christmas Crash

Around Christmas Eve on December 24, the market experienced an unexpected sharp decline. Bitcoin plummeted by $2,300 within just 45 minutes, forcing the liquidation of over $66 million in long positions. This highlighted the fragile structure during the holiday period, where low liquidity combined with large orders and leverage liquidations can cause significant price swings.

On the technical side, major assets continue to cling to critical support zones. Whether Bitcoin can hold the $83,000–$89,000 range, Ethereum the $2,750–$3,050 range, and Solana the $115–$130 range will be key to the next trend reversal.

Macro Environment Pressures and Opportunities

US economic indicators show that recent real GDP growth has reached 4.3%, demonstrating resilience since Q4 2023. Meanwhile, expectations of Federal Reserve rate cuts have diminished, with the probability of a rate cut in January falling to 13.3%, and the likelihood of maintaining rates at 86.7%.

This environment creates a paradox for the crypto market. Strong economic growth intensifies competition with traditional assets, while the retreat of rate cut expectations delays liquidity injections. However, in the long term, the Fed is likely to enter an easing cycle, which could lead to global liquidity infusion, supporting asset management firms and listed companies to continue buying, thus providing structural support to the market.

Scenario for 2026: Crisis and Turning Point

From a technical perspective, historical cycle analysis indicates that a bearish market window has already opened. The realized profit rate (SOPR) for long-term holders is at 1.53, which is typically low in a bull environment. However, the current market environment has entered a new phase that cannot be explained by simple four-year cycle theories.

The structure surrounding the cryptocurrency market has fundamentally changed. Regulations are shifting from restrictions to approvals, market participants are transitioning from minor groups to major Wall Street institutions, and institutional buying support is beginning to underpin market bottoms.

Considering this new market structure, even if a correction phase occurs, it is likely to be shorter than historical levels, and the bottom formation could receive strong support. Based on a comprehensive assessment, the bottom of this cycle’s bear market is projected to be in the $50,000–$60,000 range.

Market Trends and Regulatory Movements

From late December to January, several key events are scheduled. The US Securities and Exchange Commission’s mentions of blockchain are expected to surge through 2025, reaching around 8,000 mentions in August alone, indicating a historic level of regulatory interest in digital assets.

Internationally, the Basel Committee plans to implement a bank crypto asset risk disclosure framework starting January 1, 2026. Additionally, Switzerland’s automatic exchange of crypto tax information and the UK’s new crypto tax regulations are expected to be enacted, signaling increased regulation. While this signifies tightening rules, it also confirms that crypto assets are increasingly recognized as a legitimate part of the financial system.

Token Lock-up Schedule and Market Impact

As January approaches, multiple projects are scheduled to unlock tokens. Jupiter (JUP) will unlock 53.47 million tokens on December 28, worth approximately $10.7 million; Kamino (KMNO) will unlock 230 million tokens on December 30, worth about $1.169 million; EigenLayer (EIGEN) will unlock 36.82 million tokens on January 1, worth roughly $1.431 million. These unlockings could exert short-term selling pressure, warranting close attention from market participants.