Bitcoin Rally Driven by Spot Demand, Regulatory Clarity Ahead

The recent Bitcoin rally, particularly following news related to the United States Department of Justice (DOJ) and Federal Reserve Chair Powell, is distinguished by its underlying driver: real spot demand on the Coinbase exchange. Analyst Alex Krüger has highlighted key metrics, including the Adjusted Coinbase Premium and Cumulative Volume Delta (CVD), which show steady spot accumulation. This data indicates the move higher is being bolstered by direct purchases rather than leveraged positioning in derivatives markets, a critical distinction. Spot buying reflects a tangible capital commitment, contrasting with the temporary, often volatile bets common in futures and perpetual swaps markets.

Krüger characterizes this as a ‘true hated rally,’ noting that despite persistent narratives in crypto communities about Bitcoin lagging behind equities, the rally has advanced on the back of this steady, under-the-radar accumulation. This dynamic underscores how market perception can diverge from on-chain and exchange flow reality. The DOJ-related news served as a major macro litmus test for BTC, and its positive price response, albeit a modest surge, was supported by this foundational spot buying. Krüger posits that Bitcoin’s long-term value proposition is tied to hedging against the ‘tail risk of central bank profligacy,’ a theme that resonates during periods of geopolitical or institutional uncertainty.

From a technical perspective, Alex Krüger identifies the 50-week moving average (WMA), currently around $101,420, as Bitcoin’s key battlefield. This level represents a significant long-term trend indicator that the market is watching closely. The trader’s strategy involves looking to take profits into potential short liquidations just above the psychologically important $100,000 mark, suggesting these levels are seen as major resistance and profit-taking zones. This technical framework exists alongside the fundamental narrative of spot-driven demand, creating a complex interplay between trader behavior and investor accumulation.

Meanwhile, a potentially transformative regulatory development is on the horizon. The Digital Asset Market Clarity Act is scheduled for markup in the U.S. Senate Banking Committee on January 15, 2026. This legislative process, where lawmakers debate and shape the final bill, is crucial. The Act’s primary aim is to resolve the ongoing regulatory uncertainty and jurisdictional dispute between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). This ambiguity has been a principal barrier, causing hesitation among large institutional players like banks, pension funds, and asset managers considering entry into the Bitcoin and digital asset space.

The potential passage of the Clarity Act is viewed as a pivotal turning point. By establishing clear regulatory rules, the legislation aims to instill confidence in traditional financial institutions. For Bitcoin, this is critically bullish, as institutional participation often translates into substantial, sustained capital inflows, stronger price momentum, and reduced volatility. The market may be on the cusp of a renewed wave of institutional money, a scenario distinct from the retail-driven cycles of the past.

This prospective institutional inflow aligns with the current evidence of spot-driven demand. While the current rally is powered by committed capital on platforms like Coinbase, the future could see that demand amplified exponentially by larger, regulated entities. The combination presents a powerful thesis: Bitcoin is first experiencing organic, spot-based strength, which could then be supercharged by regulatory clarity. As the regulatory clouds lift, the fundamental argument for Bitcoin—as articulated by analysts like Krüger regarding hedge against monetary policy risk—gains a more stable foundation upon which large-scale, long-term investment can be built.