The Block Research 2026 Outlook: Bullish BTC Narrative Faces Liquidity Pressure

VADODARA, January 2, 2026 — The Block Research has released its 2026 cryptocurrency market outlook, forecasting Bitcoin dominance above 50% alongside explosive stablecoin growth and prediction market expansion. This daily crypto analysis examines the contradictions between bullish ETF narratives and looming selling pressure from corporate digital asset reserves. Market structure suggests a liquidity grab may be forming as spot ETF inflows collide with potential ETH liquidations from entities like Bitmain.

Market Context & Background

Historical cycles indicate that post-halving years often see Bitcoin consolidating before major moves. The 2024 halving preceded a 2025 rally, but current on-chain data shows UTXO age distribution suggesting accumulation by long-term holders. This context mirrors 2021 patterns where institutional inflows initially drove prices before retail capitulation. The Federal Reserve's monetary policy, detailed on FederalReserve.gov, remains a critical macro variable, with interest rate decisions impacting risk asset correlations. Related developments include Citadel's reported gains from crypto strategies and recent futures liquidation spikes, highlighting institutional participation and market fragility.

What Happened?

According to The Block Research's official outlook, analysts anticipate Bitcoin maintaining over 50% market dominance, supported by net inflows into spot ETFs. The report projects stablecoin supply surpassing $500 billion, with USDC potentially gaining share against USDT as a neutral bridging asset. Prediction markets, perp DEXs, interoperability solutions, and RWAs are flagged as strong narratives, while NFTs are expected to stagnate. Critically, the outlook warns of selling pressure from companies holding digital asset reserves, specifically noting Bitmain may begin selling ETH holdings in Q1 2026. This could coincide with declining venture capital valuations and large-scale token unlocks, creating a bearish counter-narrative to ETF optimism.

Technical Analysis & Price Action

Bitcoin currently trades at $89,708, up 1.89% in 24 hours. Volume profile analysis indicates a Fair Value Gap (FVG) between $87,500 and $91,200, suggesting potential for a liquidity grab. The 50-day moving average at $88,150 provides dynamic support, while RSI at 58 shows neutral momentum without overbought conditions. A key Order Block exists at $85,000, aligning with the 200-day MA. Bullish Invalidation is set at $85,000; a break below this level would signal failure of the dominance narrative and target the $78,500 Fibonacci 0.618 retracement. Bearish Invalidation rests at $95,000, where resistance from the previous all-time high zone could trigger profit-taking.

By The Numbers

Why It Matters

For institutions, the stablecoin growth narrative aligns with Treasury management trends, but the warning about corporate ETH sales introduces counterparty risk. Retail traders face altcoin Darwinism, where only projects with real-world use cases may survive. The prediction market surge could drive demand for oracles and layer-2 solutions, impacting Ethereum's fee market post-EIP-4844. Geopolitical risks cited in the report may amplify volatility, creating gamma squeeze opportunities in options markets.

Community Sentiment

Market analysts on X/Twitter are divided. Bulls highlight ETF inflows as a structural tailwind, while skeptics point to Bitmain's potential ETH sales as a liquidity drain. One quant noted, "The stablecoin boom is inevitable, but USDC's rise depends on regulatory clarity from the SEC." Another warned, "Token unlocks could create a supply overhang that ETF demand can't absorb."

Price Prediction / Future Outlook

Bullish Case: If ETF inflows sustain and Bitmain's sales are absorbed without price degradation, Bitcoin could challenge the $95,000 resistance, leading to a breakout toward $110,000 by mid-2026. Stablecoin growth would provide liquidity for altcoin rotations into prediction market tokens.

Bearish Case: If corporate selling pressure coincides with token unlocks and geopolitical shocks, Bitcoin may break the $85,000 Bullish Invalidation, targeting $78,500. This would trigger altcoin capitulation and delay the prediction market narrative until 2027.