The ongoing crypto crash will likely extend in January 2026 as technical headwinds gain steam. Bitcoin price remains below $90,000, while the market cap of all tokens has plunged to below $3 trillion. This article explores some of the top reasons why the crypto bull run will not happen in January.
Bitcoin Price Action Signals Potential Crypto Crash in January
Bitcoin normally determines the performance of the broader crypto market. Indeed, in most cases, the altcoin season normally happens when Bitcoin is doing well.
Technicals suggest that Bitcoin price may be on the verge of a big dive in January this year. The weekly chart below shows that the coin has formed a rising wedge pattern, which is made up of two ascending and converging trendlines.
Bitcoin has already moved below the lower side of this pattern and is now in the process of forming a bearish pennant. These patterns normally lead to a steep downward trend over time.
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BTC price has moved below the 50-week Exponential Moving Average (EMA), a sign that bears remain in control. Also, the coin has moved below the Supertrend indicator. The last time that this happened was in December 2021, and the coin plunged from $68,000 to $16,000 in the following year.
Therefore, there is a risk that the Bitcoin price will have a bearish breakout, a move that will lead to a steeper crypto crash in the coming weeks. The main target to watch will be at $74,000, its April lows.
Altcoins Have Formed a Double-Top Pattern
The other main reason why the crypto crash will continue in January is that altcoins have formed a double-top pattern. The daily chart shows that the market capitalization of all coins, excluding Ethereum and stablecoins, has formed a double-top at $913.54 billion and a neckline at $450 billion, which is nearly 20% below the current level.
Like Bitcoin, the market cap has dropped below the 50-week Exponential Moving Average (EMA). It also plunged below the Supertrend indicator, while top oscillators like the Relative Strength Index (RSI) and the MACD have continued moving downwards.
Therefore, there is a likelihood that altcoins will continue moving downwards in the coming month.
More Reasons Why the Crypto Market Crash Will Continue
There are other reasons why the crypto market crash will continue in the coming months. First, the Crypto Fear and Greed Index has remained in the fear zone, meaning that a risk-off sentiment has prevailed.
Second, there are signs that the futures open interest has continued moving downwards. Data compiled by CoinGlass shows that the open interest dropped to $128 billion on Tuesday, down sharply from the year-to-date high of $255 billion. A crypto bull run often happens when the open interest is rising.
Third, demand for crypto ETFs has largely dried up in the past few months. Data compiled by SoSoValue shows that spot Bitcoin ETFs shed over $4.4 billion in assets in the last 2 months, bringing the cumulative inflows to $56 billion.
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