Daily Crypto Signals: Bitcoin Volatility Compression Signals Stability, Altcoins Position for 2026 Recovery
Bitcoin's compressed volatility and absence of extreme price swings may prevent the dramatic drawdowns typically seen in crypto cycles
Quick overview
- Bitcoin's reduced volatility may shield it from significant price drops, maintaining its dominance in the crypto market.
- Institutional interest in altcoins like Ether and XRP is rising, with substantial inflows into their ETFs indicating growing confidence.
- El Salvador is under IMF pressure to sell its Chivo wallet, raising concerns about its compliance with loan conditions despite recent Bitcoin purchases.
- On-chain indicators suggest potential bullish momentum for Bitcoin, although some analysts predict a possible decline in its price by 2026.
Bitcoin’s compressed volatility and absence of extreme price swings may prevent the dramatic drawdowns typically seen in crypto cycles, while institutional inflows into Ether and XRP ETFs suggest growing confidence in major altcoins. Meanwhile, El Salvador faces pressure from the IMF to sell its state-run Chivo wallet as miner capitulation indicators point to potential bullish momentum ahead.
Crypto Market Developments
Bitcoin BTC/USD trading around $87,436, which is 7.39% less than its price on January 1. The cryptocurrency market is going through a time of extraordinary stability, with far less volatility than in prior cycles. Market researchers have seen that Bitcoin’s dominance stayed above 55.5% during 2025, which means that capital stayed concentrated in Bitcoin instead of moving into altcoins.
Glassnode data shows that almost other crypto sectors did worse than Bitcoin in the last three months. This shows that investors have preferred BTC over other assets in the current market. However, recent action by institutions implies that this dynamic may be changing as we move into 2026. For example, spot Ether ETFs had $84.6 million in net inflows on Monday, ending a seven-day skid of outflows after more than $700 million left these products the week before.
Institutional interest goes beyond Ethereum. XRP ETFs have seen a steady stream of inflows, with $43.9 million in net inflows, their best daily performance since early December. Since they started, XRP ETFs have brought in more than $1.1 billion in net inflows without a single day of net withdrawals. This suggests that early investors saw the asset as a long-term positioning tool rather than a short-term play.
The International Monetary Fund is still putting pressure on El Salvador about its Bitcoin holdings when it comes to rules and regulations. The IMF said that talks for selling the government’s Chivo Bitcoin wallet are “well advanced,” which could mean that some crypto holdings will be sold. This comes after a deal in May 2024 in which the IMF agreed to give El Salvador $120 million as part of a $1.4 billion loan package. The accord also said that El Salvador had to stop buying Bitcoin. Even though these limitations were in place, El Salvador’s Bitcoin Office said in November that it had bought 1,090 Bitcoin for around $100 million. This raised questions about whether the country was following the IMF deal.
Bitcoin Holds at $87,000
Anthony Pompliano, a Bitcoin entrepreneur, says that the fact that Bitcoin didn’t have a big surge at the end of the year would be a good thing for how it will do in 2026. “We didn’t get the blowoff top that I think people thought we would see at the end of Q3 or the start of Q4, but we also haven’t seen the big 80% drop that people usually expect,” Pompliano said in an interview with CNBC. Some Bitcoin supporters, like BitMine chair Tom Lee and BitMEX co-founder Arthur Hayes, had predicted that Bitcoin would hit $250,000 in 2025. However, the more stable price action may help keep things stable in the future.
Bitcoin’s volatility is getting lower, which implies that holders may not see as big of price increases, but they will also have less chance of losing money. “Given how volatile things are right now, it would be very surprising if Bitcoin’s volatility had dropped so much and still had the potential to drop 70% or 80%,” Pompliano said. Even if it didn’t live up to bullish projections, Bitcoin has done quite well over the long run, rising 100% over two years and about 300% over three years through compounding profits.
However, on-chain signs point to possible short-term events that could cause prices to change. VanEck experts said that Bitcoin’s hashrate fell by 4% till December 15 because Chinese miners stopped working. Historically, this miner capitulation has been a bullish contrarian signal. Data shows that when hashrate fell during the previous 30 days, Bitcoin’s 90-day forward returns were positive 65% of the time, compared to only 54% of the time when hashrate rose. The researchers said, “When hash rate compression lasts for longer periods of time, positive forward returns tend to happen more often and with greater magnitude.”
But not all analysts agree with this positive view. Peter Brandt, a seasoned trader, reportedly said that Bitcoin might collapse to $60,000 by the third quarter of 2026. Jurrien Timmer, Fidelity’s director of global macroeconomic analysis, said that 2026 could be a “year off” for Bitcoin, with prices possibly sliding to $65,000.
Top Altcoins to Watch in 2026
- Ethereum ETH/USD is currently trading below the 50-week simple moving average of $3,070, and it has to hold above $2,623 to stay strong. If it breaks below this level, it might drop to $2,111 and maybe even $1,600. If prices break above the 20-week exponential moving average at $3,454, though, it would mean that bearish momentum is diminishing and prices might rise above $4,000 and eventually the $6,194 to $9,030 area.
- BNB BNB/USD is trading between moving averages at a balanced level of supply and demand. If it breaks below the 50-week SMA of $775, it could go down to firm support at $500. Historical trends show that after sharp drops, trading may stay within a band of $500 to $930. If bulls can push above the 20-week EMA, the next targets are $1,182 and the all-time high of $1,375.
- XRP XRP/USD is sliding toward important support at $1.61, which is negative, but it is still getting a lot of ETF inflows. If the price drops below $1.61, it could drop to $1.25 and then to the $1 level, which is a mental level. However, if the price bounces and breaks above the 20-week EMA at $2.38, it would mean that bearish momentum is diminishing and the price might rise to $3 and maybe even $5.19.
- Solana SOL/USD is trading below moving averages, and support is projected at $95. If bears breach this level, the price might drop to $80 and then $50. If the price breaks above the moving averages and stays above them, it might stay in a range between $95 and $260. The next leg up would start above $260 and aim for $425.
- Dogecoin DOGE/USD is at the bottom of its $0.13 to $0.29 range and needs to defend its essential support. If prices stay below $0.13 for a long time, they might drop to $0.09. On the other hand, if buyers push prices over $0.29 and prices stay above moving averages, consolidation could last longer and finally lead to a breakout toward $0.48.
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