Can Bitcoin Escape the 2026 Liquidity Crunch? Analyst Willy Woo Weighs Short-Term Strength Against Structural Headwinds

Prominent crypto analyst Willy Woo has painted a mixed picture for Bitcoin’s trajectory, suggesting near-term recovery potential while flagging significant concerns for the broader 2026 outlook. The analyst’s capital flow metrics indicate BTC bottomed on December 24, marking the beginning of a recovery phase that typically requires 2-3 weeks to materialize in price action—a timeline that appears to be unfolding now.

Short-Term Tailwinds Support the Rally

Currently trading around $91.83K, Bitcoin is testing critical technical resistance in the $98,000 to $100,000 zone. According to Woo’s analysis, this level must hold as it represents a crucial inflection point mirroring mid-2021 conditions. One significant catalyst is the reactivation of futures market liquidity following months of drought, a pattern historically correlated with secondary cycle peaks. The analyst acknowledges that while overbought technical signals exist in the short term, underlying momentum from capital inflows could push Bitcoin toward its all-time high of $126.08K if resistance levels give way.

The Liquidity Problem Looming Ahead

However, the longer-term picture darkens considerably. Woo’s broader analysis reveals a troubling divergence: market liquidity relative to price momentum has been deteriorating since January 2025. The current phase lacks adequate underlying liquidity to sustain a robust rally, positioning the market in what Woo characterizes as a “hotspot” environment—prone to volatility but lacking structural support.

For Willy Woo’s bearish 2026 thesis to reverse, substantial spot buying pressure would need to break the declining liquidity trend. Until then, the analyst remains cautious, noting that a formal bear market confirmation would require sustained Bitcoin outflows—a lagging indicator that hasn’t yet materialized. The divergence between short-term technicals and medium-term flows will likely define Bitcoin’s story in the months ahead.

#BTC