BTC and ETH Yearly Candles Signal Potential Weakness in Crypto Markets

As we step into 2026, cryptocurrency traders are closely examining the yearly candles for major assets like Bitcoin (BTC) and Ethereum (ETH), and the outlook isn't entirely optimistic. According to Omkar Godbole, a finance expert with MMS Finance and CMT credentials, the yearly candles for both BTC and ETH don't look promising. He highlights that ETH's performance is particularly concerning, as it failed to maintain a position above its previous bull market high, even though BTC managed to achieve this milestone in 2024. This observation comes from his tweet on January 1, 2026, where he pointed out the stark contrast in their yearly chart patterns. For traders, this could indicate underlying weaknesses in the market, prompting a reevaluation of long-term positions in these leading cryptocurrencies.

Analyzing BTC's Yearly Candle and Market Resilience

Bitcoin's yearly candle, while not stellar, shows some resilience compared to its counterpart. In 2024, BTC successfully broke and held above its prior bull market peak, which was a significant achievement amid fluctuating market conditions. This breakthrough provided a psychological boost to investors, often seen in trading volumes spiking around key resistance levels. For instance, historical data from that period reveals increased on-chain activity, with metrics like daily active addresses and transaction volumes rising notably during the breakout. Traders monitoring pairs like BTC/USD or BTC/USDT on major exchanges would have noted support levels around the $50,000 to $60,000 range solidifying after the 2024 high. However, the current yearly candle forming in 2026 suggests potential exhaustion, with possible bearish divergences in indicators such as the Relative Strength Index (RSI) on yearly timeframes. Without real-time data, we can infer from past patterns that if BTC fails to close the year strongly, it might test lower support zones, offering short-term trading opportunities for those using derivatives like futures or options. Institutional flows, as tracked by various blockchain analytics, continue to show interest in BTC, but sentiment could shift if macroeconomic factors like interest rate changes pressure the asset.

ETH's Struggles: Failure to Break Bull Market Highs and Trading Implications

Ethereum's yearly candle paints a more troubling picture, as noted by Godbole. Despite BTC's success in 2024, ETH couldn't establish a firm foothold above its previous bull market high, which was around $4,800 from the 2021 peak. This failure is evident in the candle's structure, potentially forming a lower high or even a bearish engulfing pattern on the yearly chart. Trading-focused analysis reveals that ETH's underperformance might be linked to factors like network congestion, competition from layer-2 solutions, or shifts in decentralized finance (DeFi) activity. On-chain metrics, such as gas fees and total value locked (TVL) in ETH-based protocols, have shown variability, with periods of decline correlating to price weakness. For traders, this translates to caution in pairs like ETH/BTC or ETH/USD, where the ETH/BTC ratio has been trending downward, indicating BTC dominance. Resistance levels near the old highs could act as barriers, while support might be found around $2,000 to $2,500 based on historical bounces. In a broader market context, this could signal opportunities for hedging strategies, perhaps rotating into altcoins or stablecoins during periods of ETH volatility.

From a trading perspective, these yearly candle insights encourage a data-driven approach. Market indicators like moving averages on higher timeframes, such as the 200-week MA for BTC, have historically provided reliable support during downturns. For ETH, the failure to surpass key levels might correlate with reduced trading volumes, as seen in exchange data from late 2025, where daily volumes dipped below average. Cross-market correlations are also worth noting; for example, if stock markets experience corrections, crypto often follows, amplifying risks for leveraged positions. Institutional investors, monitoring flows through tools like Glassnode reports, might adjust portfolios accordingly, potentially leading to increased volatility. Traders should watch for breakout signals, such as a close above previous highs with rising volume, to confirm bullish reversals. In the absence of immediate catalysts like ETF approvals or regulatory clarity, sentiment remains mixed, making risk management crucial. Overall, while BTC shows more strength, ETH's horrible candle underscores the need for diversified strategies in the evolving crypto landscape.

Looking ahead, the implications for 2026 trading are profound. If these yearly patterns persist, we might see a consolidation phase, with opportunities in range-bound trading. For instance, scalpers could target intraday movements in BTC perpetual futures, aiming for quick profits around pivot points. Long-term holders, or 'HODLers,' might view this as a buying dip, supported by Bitcoin's halving cycles that historically precede rallies. Ethereum's upgrades, like potential sharding implementations, could eventually alter this narrative, but current charts suggest patience is key. By integrating these analyses with real-time indicators when available, traders can better navigate the uncertainties, focusing on metrics like hash rates for BTC or staking rewards for ETH to gauge network health. This holistic view not only aids in spotting trading opportunities but also in mitigating risks in a market known for its rapid shifts.