Cryptocurrency market shows resilience, but consolidation continues

The cryptocurrency market remained resilient on Friday, January 2, 2026, with Bitcoin holding steady above the $88,600 mark, while Ethereum traded comfortably above the $3,000 level. Bitcoin, which started the year near the mid-$80,000s, continues to hover within this range, with analysts noting that the options market has become a focal point for expressing market sentiment.

 

The growth in covered call strategies, analysts said, reflects a yield-seeking response to a weakening futures basis. Additionally, the stable put-to-call ratios and increasing demand for downside protection point to a market that is increasingly hedged. At the same time, price action is compressing, with volatility being monetized rather than pursued aggressively.

 

 

Vikram Subburaj, CEO of Giottus, sees this as an indication of a range-bound yet supported Bitcoin. "With spot prices hovering near active investor cost bases and larger holders continuing to accumulate, the current market setup seems less about distribution and more about a pause while positioning resets," he said.

Macro factors keep liquidity suppressed

The macroeconomic backdrop offers further context for this extended pause. According to minutes from the US Federal Reserve, policymakers are focused on preventing short-term funding stress rather than stimulating risk appetite. This shift in focus, analysts said, reinforces a 'liquidity management' phase that is suppressing volatility across assets, thereby limiting momentum trades.  Subburaj also pointed out that year-end dynamics have muted price responses, even in the face of constructive signals like institutional accumulation and large treasury buyers. "The market appears to be waiting for liquidity to return rather than repricing fundamentals in real time," he said.

 

Despite the market's subdued activity, Bitcoin and Ethereum are still 29 per cent and 39 per cent below their respective all-time highs. As of the latest data, Bitcoin was trading at $88,696.93, reflecting a 1.35 per cent rise in the last 24 hours. It had a trading volume of $20.48 billion, fluctuating between $87,459 and $89,008 during the session, according to CoinMarketCap. Ethereum, similarly, showed a parallel trend, trading at $3,014 with a 24-hour volume of $11.46 billion, with the token moving between $2,971 and $3,028. 

Consolidation in Bitcoin, tactical moves in altcoins

The CoinSwitch Markets Desk noted that Bitcoin buyers have defended the $87,200–$87,400 zone, which is providing short-term support. However, upward attempts near $89,000 have faced consistent resistance. "The formation of higher lows suggests underlying strength, but momentum remains moderate. The market is likely to remain in consolidation, with a clearer direction emerging only after a decisive break above resistance," they said.

 

From a technical standpoint, Subburaj believes the $82,000–$84,000 range remains crucial support for Bitcoin. "The upside appears capped near the $90,000–$92,000 levels until liquidity improves. We can expect range-bound trading for the time being. Traders should avoid leverage and accumulate selectively near support, waiting for a sustained break above $92,000 with rising volumes before adding risk," he advised. 

 

Meanwhile, altcoins are showing similar patterns, with a greater degree of dispersion than clear directional moves. Yield-driven strategies and ETF flows, according to analysts, are focused on large, liquid tokens, while smaller altcoins continue to struggle for attention.  Analysts further noted that infrastructure and custody risks are being repriced, and speculative beta is constrained due to the absence of a clear Bitcoin trend. Until Bitcoin resolves its volatility squeeze and macro liquidity becomes less restrictive, altcoin movements, analysts believe, are likely to remain rotational and tactical, with no broad-based expansion expected.