MarketsBitcoin
|3 min ReadBitcoin’s $100k Siege: Fed Liquidity Meets Supply Shock
Jax Morales
Senior Analyst
Published
Jan 17, 2026
Bitcoin is once again hammering at the $100,000 psychological fortress. Unlike the failed breakout attempts in late 2025, the market structure has fundamentally shifted. The "sell the news" leverage flush is behind us, and we are entering a phase of systematic repricing driven by two potent forces: the return of Federal Reserve liquidity and the exhaustion of retail sellers.
The Macro Pivot: Don't Fight the Fed
The narrative has moved from "Inflation Hedges" to "Liquidity Proxies." With Core CPI cooling to 2.6% and the Federal Reserve initiating rate cuts in Q1 2026, the cost of capital is dropping. This is critical because Bitcoin acts as the most sensitive sponge for global M2 money supply expansion.
We are seeing the classic "Policy Lag" effect dissipate. The market is pricing in the upcoming Quantitative Easing (QE) cycles now. When bond yields fall, risk assets fly. The setup mirrors the post-COVID liquidity injection, but this time, the capital isn't flowing into speculative JPEGs—it's flowing into the hardest asset on the board.
The Institutional Floor: Saylor’s Bid
The correction in Q4 2025 served a vital purpose: it transferred coins from weak hands to strong hands. While retail investors panicked and withdrew $6.3 billion from ETFs, MicroStrategy executed a masterclass in accumulation, scooping up 11,000 BTC ($1.1 billion).
This divergence creates a "Supply Shock." The coins sold by retail in the $80k-$90k range are now locked in corporate treasuries and cold storage. The available float on exchanges is thinning. When the inevitable Q1 demand surge hits, the order books are too thin to suppress price, forcing a vertical move to find willing sellers.
Q1 2026 Outlook: The Blue Sky Breakout
The first quarter is historically Bitcoin’s strongest performing period (averaging +50% returns) due to new annual capital allocations and tax-loss harvesting resets.
The Trigger: A confirmed daily close above $100,000. This obliterates the "psychological sell wall."
The Accelerator: Short liquidations. Billions in short interest are piled up at $99k. Once breached, forced buying will propel price discovery into the $110k-$125k zone rapidly.
The Risk: Watch the funding rates. If they spike too early, we may see one last "leverage flush" to $92k before the real move.
Ultimately, the 2026 Q1 thesis is simple: The Fed is printing, Saylor is buying, and retail is out of coins to sell.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.