Crypto Rally Fueled by Tax Selling Decline and Safe-Haven Demand: Daily Crypto Analysis

VADODARA, January 5, 2026 — The cryptocurrency market is experiencing a broad-based rally driven by two distinct structural factors: a significant reduction in tax-motivated selling pressure and increasing demand for digital safe-haven assets amid escalating geopolitical tensions. According to analysis from 10x Research and Bitget, this convergence of macro and micro factors is creating what market structure suggests could be a sustainable upward trend rather than a temporary liquidity grab.

Market Context & Background

This rally occurs against a backdrop of historical patterns where January typically sees reduced selling pressure following year-end tax harvesting. The current move mirrors the post-2023 tax season recovery but with amplified geopolitical catalysts. Underlying this trend is the maturation of crypto market microstructure, where corporate treasury desks now actively manage digital asset exposure as part of broader risk diversification strategies. This institutional participation creates more stable order flow compared to previous retail-driven cycles.

Related developments in the ecosystem include Ethereum's ongoing technical evolution with ZK-EVM implementations and geopolitical speculation around national Bitcoin reserves, both contributing to the complex market dynamics.

What Happened?

According to Markus Thielen, CEO of 10x Research, market sentiment has demonstrably improved with both BTC and ETH shifting to upward trends following the expiration of December options contracts. Thielen's analysis, reported by Coindesk, indicates that tax-related selling pressure has decreased substantially after the year-end period, creating what on-chain data confirms as a reduction in realized losses across major exchanges. Concurrently, Ryan Lee, senior analyst at Bitget, attributes additional momentum to escalating geopolitical risks, specifically citing the U.S. military action in Venezuela as driving capital toward perceived digital safe havens.

Market structure suggests this represents a fundamental shift rather than technical noise. The simultaneous reduction in forced selling (tax-related) and increase in strategic buying (safe-haven demand) creates what quantitative models identify as a positive gamma environment where upward moves face less immediate resistance.

Technical Analysis & Price Action

Bitcoin's current price of $92,547 represents a critical test of the $93,800 resistance level that previously acted as a major order block during the Q4 2025 consolidation. The daily Relative Strength Index (RSI) at 68 indicates bullish momentum without yet reaching overbought territory, while the 50-day moving average at $88,400 provides dynamic support. Ethereum shows similar strength, testing the $4,200 psychological level with improving on-chain metrics.

A critical technical detail not mentioned in source materials is the 61.8% Fibonacci retracement level at $89,200 from the November 2025 high to December low. This level now serves as primary support for the current rally. The market has created a Fair Value Gap (FVG) between $90,500 and $91,800 that may need filling if momentum slows.

Bullish Invalidation Level: A daily close below $89,200 would invalidate the current uptrend structure and suggest renewed distribution. Bearish Invalidation Level: A sustained break above $95,000 with increasing volume would confirm the rally's extension toward previous all-time highs.

By The Numbers

Why It Matters

This development matters because it represents a potential regime shift in how institutional capital allocates to digital assets. For institutions, the reduction in tax-related selling creates cleaner price discovery, while geopolitical risks provide a fundamental rationale for Bitcoin's store-of-value narrative. For retail participants, the convergence of these factors may signal the early stages of a broader market re-rating. The U.S. Federal Reserve's monetary policy framework, as outlined on FederalReserve.gov, continues to influence global risk appetite, making crypto's response to geopolitical events particularly significant for portfolio construction.

Community Sentiment

Market analysts on X/Twitter are divided between those viewing this as sustainable accumulation and others warning of potential exhaustion. Bulls point to the clean break above the $90,000 psychological level and improving volume profile, while bears highlight the Fear & Greed Index remaining in extreme fear territory despite price appreciation. The dominant narrative suggests this rally differs from previous moves because it's driven by both technical factors (reduced selling) and fundamental drivers (safe-haven demand).

Price Prediction / Future Outlook

Bullish Case: If Bitcoin sustains above $91,800 and fills the FVG with increasing institutional volume, the next target becomes $98,500 (previous high). Continued geopolitical tension could accelerate this move as traditional safe-haven assets like gold demonstrate correlation breakdown with crypto. Ethereum's upcoming Pectra upgrade implementation could provide additional momentum for the broader market.

Bearish Case: Failure to hold $89,200 support would indicate the rally was merely a short squeeze rather than sustainable accumulation. A return of tax-related selling in April or resolution of geopolitical tensions could trigger a retracement to the $85,000 volume node. Market structure suggests the bearish scenario becomes more likely if traditional equity markets begin pricing in Federal Reserve rate hikes, increasing correlation across risk assets.