Bitcoin closed the daily candle in the red, marking its first negative daily close of the year after a strong start with several green days in early January. Bitcoin began the year on a bullish note, rallying approximately 5-8% from late-2025 lows around $88,000, briefly touching highs near $94,700.
Previous days showed gains: January 3: +0.71%, January 4: +1.02%, January 5: +2.53%, January 6: slight dip of -0.13% near flat. On January 7, BTC opened around $93,739 and closed at approximately $91,670, down -2.21% for the day with intraday lows near $91,587.
This pullback came amid profit-taking after the early-year rebound, with prices retreating from resistance near $94,645 to around $92,500 mid-day before closing lower. This minor dip was attributed to short-term traders locking in gains, but analysts described it as consolidation rather than a trend reversal.
Bitcoin remained comfortably above $90,000 support, with optimism for further upside in January driven by institutional inflows, spot ETFs adding hundreds of millions early in the month and expectations of a potential new all-time high later in 2026.
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The market viewed this as healthy volatility following the initial 2026 pump, not the start of a broader downturn. The first red daily close on January 7, 2026 down ~2%, closing around $91,500–$92,000 after rejecting resistance near $94,600–$94,700 is widely viewed as a healthy pullback rather than the start of a major downturn.
Profit-taking after early-year gains — Bitcoin rallied 5–8% from late-2025 lows ~$88,000 in the first week of January, driven by fresh institutional inflows— spot ETFs added hundreds of millions and new-year allocations. This dip allows short-term traders to lock in profits without disrupting the uptrend.
Consolidation phase — Analysts describe it as normal volatility in a bullish channel. Key support holds above $90,000, with no breakdown of major trends. Bollinger Bands show compression, often preceding big moves up or down, but current sentiment leans toward continuation higher.
Funding rates and leverage remain stable; no signs of forced liquidations or panic selling. Bitcoin dominance is dipping slightly, hinting at minor rotation to alts, but BTC remains the driver. Bullish institutional flows ? Spot Bitcoin ETFs saw reversals from late-2025 outflows, with strong inflows early January like BlackRock leading.
Companies like Strategy formerly MicroStrategy continue accumulating. Options market optimism ? Heavy betting on $100,000+ calls expiring end-January on platforms like Deribit, reflecting expectations of a breakout. Analyst consensus ? Tom Lee (Fundstrat): New all-time high by end-January.
Bernstein: Markets have bottomed; targeting $150,000–$200,000 by end-2026/2027. Others like Standard Chartered: $150,000+ in 2026, with January as a potential catalyst month. This minor red day does little to alter the constructive outlook: Bullish drivers intact — Falling interest rates, geopolitical safe-haven bids, regulatory progress e.g., potential Clarity Act, and post-halving supply dynamics support higher prices.
Potential upside — A break above $94,600–$95,000 could target $100,000–$105,000 quickly. Many see January as the launchpad for renewed momentum toward prior ATH ~$126,000 or beyond. If $90,000 support fails, deeper correction to $85,000–$88,000 possible, tax-loss harvesting echo or macro pressures. However, most view any further dip as a buying opportunity in an ongoing bull cycle.
Overall, this first red close reinforces consolidation within a bull market, setting up potential for stronger gains later in January rather than signaling weakness. The early-2026 rebound from 2025’s Q4 sell-off remains on track.