Bitcoin Holders → "It's Gonna Get Worse!"

Bitcoin and the broader cryptocurrency market face a precarious start to 2026, with analysts warning of a potential "bull trap" that could precede a significant 40% correction. While long-term sentiment remains positive, a convergence of regulatory stalling, macroeconomic tension, and technical sell signals suggests that Bitcoin could briefly rally to $105,000 before retracing heavily toward the $75,000 support level.

Key Points

• Technical Warning: Market analysts identify bearish RSI divergence patterns suggesting a short-term rally followed by a drop to approximately $75,000.
• Regulatory Gridlock: The "Clarity Act" faces renewed opposition from Coinbase CEO Brian Armstrong, creating a rift with other industry leaders like Ripple’s Brad Garlinghouse.
• Global Adoption: Despite U.S. uncertainty, Russia, Belarus, and Moldova are accelerating frameworks to legalize crypto banking and trading by 2026.
• Corporate Strategy Shift: Tom Lee’s Ethereum treasury company has drawn scrutiny for diverting capital into "Beast Industries" rather than staking ETH.

Market Outlook: The Case for a Q1 2026 Correction

Despite the prevailing bullish sentiment for the long term, technical analysis points to significant volatility in the first quarter of 2026. Analysts utilizing money flow and Relative Strength Index (RSI) data have identified a recurring "W dip" pattern. Historically, this formation indicates a deceptive upward move—often designed to trap retail investors—before a sharp decline.

According to current projections, Bitcoin could surge to between $100,000 and $105,000 in the immediate short term. However, this rally is expected to lack sustainability. If specific macroeconomic and regulatory "headwinds" materialize, the asset could fall to retest the $75,000 level. This price point represents previous cycle resistance turned support and would constitute a full 40% correction from recent highs.

Three primary drivers have been identified as catalysts for this potential downturn:

• Stalled progress on the Clarity Act in Washington.
• Monetary policy friction involving Federal Reserve Chair Jerome Powell.
• Threats of a U.S. government shutdown.

Industry Divided Over the "Clarity Act"

The crypto industry's unified front regarding legislation appears to be fracturing. While the recently passed "Genius Act" successfully enabled stablecoin rewards, the pending "Clarity Act" has become a source of contention between major industry players and the traditional banking sector.

Coinbase CEO Brian Armstrong has publicly withdrawn support for the bill in its current form, alleging that the banking lobby is attempting to co-opt the legislation to protect their profit margins and undermine crypto innovation.

"The banks really are coming and trying to undermine the president's crypto agenda. I mean, these are the same banks that debanked him and his family... They want to come in and say that Americans should not be able to actually earn more money on their money. They're trying to protect their own profit margins."

Conversely, Ripple CEO Brad Garlinghouse argues that the industry cannot afford to let the perfect be the enemy of the good. With the bill close to finalization, Garlinghouse is urging the community to support the legislation to establish a regulatory baseline, regardless of its imperfections.

"Clarity is always better than chaos. And the industry needs clarity... Is the market structure bill that's pending in the banking committee perfect? No, certainly not. But is it better than nothing? Absolutely... We shouldn't give up now."

Adding to the complexity, billionaire investor Mike Novogratz remains optimistic, predicting that a version of the bill could still pass within weeks due to earnest interest from both Democratic and Republican senators.

Global Adoption and Corporate Pivots

While the U.S. grapples with regulatory specifics, international markets are moving forward aggressively. Reports indicate that Russia has finalized a draft bill to legalize crypto trading, potentially positioning it ahead of the U.S. in regulatory clarity. Similarly, the central bank of Belarus has signaled that crypto-native banks could launch within six months, and Moldova is set to legalize trading in 2026.

In the corporate sector, institutional interest remains high, with Goldman Sachs reportedly dedicating significant resources to tokenization and stablecoin infrastructure. However, not all corporate moves have been well-received. Tom Lee’s Ethereum treasury company faced backlash after allocating $200 million to purchase a stake in "Beast Industries"—associated with content creator Mr. Beast—rather than purchasing and staking Ethereum as anticipated by investors. The company defended the move as a "moonshot" investment opportunity.

As the market approaches Q1 2026, investors should prepare for heightened volatility. While the long-term trajectory for 2026 remains bullish with increasing institutional integration, the immediate weeks require navigating a complex landscape of political maneuvering and technical resistance levels.