Bitcoin and Ethereum are off to their worst start of the year in a decade—but some see a rebound in sight

Bitcoin and Ethereum are facing their worst start to the year in a decade, but analysts suggest a potential rebound may be on the horizon.

If you thought 2023 was rocky for Bitcoin and Ethereum, brace yourself; this year has opened with the worst performance in a decade for both leading cryptocurrencies. Yet, amidst this downturn, some analysts are identifying potential green shoots of recovery. Could the tides be about to turn for BTC and ETH, or is further decline on the horizon? Why Are Bitcoin and Ethereum Struggling Right Now? Bitcoin (BTC) and Ethereum (ETH) have kicked off 2026 with a thud, nearing **20%** and **25%** losses respectively in January alone. This marks the worst start to a year since 2016, causing many investors to reconsider their strategies. According to on-chain analyst Sarah Kim from Glassnode, "The inflow of funds has significantly slowed, creating a more bearish sentiment in the market." This dip has led to increased selling pressure. What Do the On-Chain Metrics Say? Recent data from CryptoQuant reveals that Bitcoin's exchange reserves are **at their highest level** since December 2022, indicating that more investors are choosing to sell rather than hold. Ethereum’s network activity has also seen a notable drop, with average daily transactions declining by approximately **15%** compared to last month. Are There Signs of a Potential Recovery? Despite the gloomy start, there are whispers of a potential rebound. Historical data shows that after such poor performances, BTC and ETH often experience significant recoveries. For instance, following 2016’s downturn, Bitcoin surged over **100%** within a few months. Could we see a similar pattern unfold this year? What Are Analysts Predicting? Leading analysts are divided. Marcus Wei from CryptoQuant mentions, "While the current metrics may imply further downside, the accumulation trend among long-term holders suggests that many are betting on a recovery." Approximately **66%** of Bitcoin addresses are now in profit, indicating that many investors are still optimistic. What Factors Could Fuel a Rebound? A possible driver for recovery