Bitcoin weekly: The relief rally is on

Sentiment across social media seemed to reach a low point right before New Year’s eve. Since then the crypto market is rallying, and there is a decent chance the rally will continue. Big picture though, stay cautious, and expect any rally to eventually turn into a bear trap.

Also watch the accompanying chart analysis on YouTube.

Last Monday I wrote that if there is going to be a relief rally in crypto, it’s going to have to come soon. And now it might actually be coming. Starting out the year on Thursday, bitcoin slowly began to inch up. And over the weekend, some altcoins bounced strongly, as late shorters are getting squeezed.

Sentiment across my X timeline seemed to reach a low right before New Year’s eve, with more and more people accepting a bearish outlook for 2026. Sentiment in itself is not a reliable signal, but counter-trend rallies are much more likely to happen when most people have given up hope.

With that in mind, and with stock markets holding up, there is a decent chance here for the crypto rally to continue over the coming weeks.

Be aware that in the bigger picture though, nothing has changed. Bitcoin still broke down on November 16, and there are no clear signs that the bottom is in just yet. Until that happens, the bearish bias should remain: expect rallies to eventually be sold into, and then turn down again.

On the daily bitcoin chart, the next level up to watch is resistance at $94k. Get above that, and the rally can continue. If so, look for stronger resistance around $100k and $109k.