Institutions re-enter the market for the second time, FOMC meeting window opens, Bitcoin rebounds and breaks through key levels

The market in early 2026 is approaching a turning point. Bitcoin recently rebounded from a low of $87,000 at the end of December to around $93,000. More notably, behind this upward movement lies a key variable—the timing of the FOMC meeting— as the Federal Reserve’s policy expectations are adjusting, becoming an important catalyst for shifts in crypto market sentiment.

According to the latest data, the current BTC price is fluctuating around $89,940, having retreated from the rebound high of $93,000. However, signals from market positioning and capital flow do not indicate weakening; instead, they reveal that the market structure is undergoing a subtle recovery process.

US Institutional “Second Entry”—Coinbase Premium Index Reversal

The year-end sell-off season is behind us, and the return of US institutional investors has become the core driver of this rebound. The “Coinbase Premium Index,” which measures the trading difference between US and global markets, is performing a V-shaped reversal, bouncing from the -150 deep pit at the end of December to near zero. This shift carries significant implications.

When the premium index turns positive from negative, it indicates a formal return of dollar buying. As the FOMC meeting date is set and policy expectations become clearer, institutional caution begins to ease. Pessimistic sentiment is gradually giving way to rational positioning, often a precursor to a major rally.

Sentiment Reversal: Fear Index Drops Out of “Extreme Panic” Zone

The “Crypto Fear and Greed Index,” measured across volatility, trading volume, and social sentiment, has risen from 29 last week to 40, officially exiting the “extreme fear” zone. Although CoinGlass platform data still shows a 26-point discrepancy, the overall trend of “diminishing panic and shifting to observation” is quite clear.

This improvement in sentiment is directly related to the approaching FOMC meeting and the gradual clarification of policy expectations. Market participants are no longer in the dark about the Fed’s actions; the convergence of expectations has led to lower volatility and boosted the sentiment index.

Stable Positioning: Bullish but Not Overleveraged

The derivatives market’s “Long/Short Ratio” has declined during deleveraging but remains above the 1.0 threshold. This means that long positions still outweigh short positions, and there are no signs of panic-driven crashes.

It is worth noting that this stability does not stem from excessive leverage but from a rational deleveraging process. This reduces the risk of a chain reaction of liquidations in the future and leaves room for subsequent rebounds.

Pre-FOMC Concerns: Rate Cut Expectations Re-adjust

However, underlying currents remain turbulent behind the optimistic sentiment. After the hawkish signals from the December FOMC meeting, market expectations for when the Fed will start cutting rates have been significantly lowered. Each advancement in the FOMC timeline could trigger a new round of expectation adjustments, posing a potential threat to the fragile consensus in the crypto market.

Although the Fear Index has rebounded, it remains in the “fear” zone rather than “greed,” reflecting that investors’ cautious attitude toward policy direction has not fully dissipated. The Fed’s rate hike cycle has ended, but the uncertainty surrounding the pace of rate cuts remains a market concern.

Year-End Tax Adjustment Effects and Technical Rebound: Dual Considerations

Recent rebounds partly stem from the end-of-year “tax relief” season (selling loss positions for tax deductions), which is a technical rebound rather than a sign of full confidence return. This indicates that, although multiple indicators have improved, market participants’ confidence base still needs further solidification.

The true confirmation will come when the Coinbase Premium Index “firmly turns positive” and stabilizes, confirming that institutional capital has fully entered the market, rather than a short-term technical bounce.

Rational Trader Approach: Cautious Accumulation, Avoid Blind FOMO

Overall, the resurgence of institutional buying, improved sentiment, and stable positioning lay a foundation for Bitcoin’s upward movement. However, the approaching FOMC meeting, policy uncertainties, and lingering fear sentiment mean that the current risk-reward balance remains cautious.

Experienced traders generally adopt a “cautious accumulation rather than blind chasing” approach—continuing small-scale positions until technical support and policy expectations stabilize. This rational trading rhythm may yield longer-term benefits more than chasing short-term gains.