Bitcoin Shatters $97,000 Barrier, Igniting Crypto’s First Major 2026 Rally
Digital gold just got a whole lot heavier. Bitcoin blasted through the $97,000 ceiling, kicking off what analysts are calling the first major bull run of the year. The move signals a decisive shift in market sentiment—and a potential headache for traditional finance skeptics.
The Domino Effect
When Bitcoin sneezes, the entire crypto market catches a cold—or in this case, a fever. The breakout above $97,000 isn't happening in a vacuum. It's pulling the entire ecosystem upward, with altcoins and major tokens posting significant gains in its wake. The rally's momentum suggests this is more than a fleeting pump; it's a structural move driven by institutional inflows and renewed retail interest.
Beyond the Price Tag
Forget the number for a second. The real story is the velocity. This surge past $97,000 demonstrates a market that's absorbing sell pressure and still climbing—a classic sign of underlying strength. It's a direct challenge to the 'overhyped asset' narrative that's been peddled in some quarters of Wall Street. You know, the same folks who missed the last three rallies.
A New Paradigm or a Familiar Cycle?
Every major rally brings the same question: is this time different? The infrastructure now—regulated exchanges, spot ETFs, clearer frameworks—is lightyears ahead of 2021. Yet, the human psychology of greed and fear remains a constant. The move past $97,000 will test both the new institutional foundations and the old speculative impulses.
The bottom line? The market has spoken. A key resistance level is now support, and the first major rally of 2026 is officially underway. For traditional portfolio managers still waiting for the 'right entry point,' that point might have just been $97,000. Their loss.
Key variables driving this rally
The latest U.S. Consumer Price Index (CPI) report shows that inflation is starting to cool down, boosting expectations of additional rate cuts in 2026. Core CPI is down to 2.6% from 2.7%, with monthly CPI for both headline and core at 0.3%. This type of data has historically been positive for risk assets like cryptocurrencies, which was likely why it was one of the main catalysts for this rally.
Crypto ETF inflows remain positive as well, with Coinglass reporting $1.2 billion was added to all cryptocurrency ETFs in the last 5 trading days. This shows that institutional sentiment is leaning toward accumulation, a good sign for markets.
Binance also attributed short-term momentum in crypto markets yesterday to positive regulatory sentiment tied to progress with the Digital Asset Market Clarity Act of 2025 (CLARITY Act). Some goals of this bill are to “clarify the regulatory split between the SEC and CFTC, place most non-security digital assets under CFTC oversight, and reduce uncertainty around token issuance and secondary market trading.” The Senate Banking Committee published a draft of the bill yesterday with a markup vote scheduled later this week.
Why markets have since slowed down and what to expect next
The crypto community was torn over the first draft of the bill, with some prominent industry leaders expressing support and others expressing disdain. The markup vote was inevitably canceled upon Coinbase CEO Brian Armstrong publicly withdrawing his support for the bill in its current form.
He stated it has “too many issues,” including calls for government access to DeFi users’ financial records, a ban on tokenized equities, “erosion of the CFTC’s authority,” and more. Despite this, Armstrong stated he is still optimistic that with continued effort, the proper outcome with this bill can be achieved. This news has since caused markets to stall, as additional time will now be required to amend the bill.
Going forward, progress on the CLARITY Act, further news on rate cuts, and additional U.S. inflation and labor market data can all be seen as short-term catalysts that could generate another rally. The Fear & Greed Index is currently sitting at 54 (neutral), up from the low 20s (fear) in mid-December 2025. This demonstrates that overall market sentiment is significantly improving, but investors are still exercising a good degree of caution.
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