Venezuela Short Squeeze

January 4, 2026

The short squeeze we foresaw (refer to Friday’s note). Bitcoin at $91,300 (+4% week) after crushing through $90K resistance—two-week high. Ethereum at $3,150 (+7% week), strong momentum building. Solana $132 (+8% week). The BOLLINGER BANDS SQUEEZE RESOLVED BULLISH exactly as predicted Friday. This is THE confirmation.

THE CATALYST: U.S. military action in Venezuela (Maduro captured) triggered initial sell-off, then MASSIVE short squeeze as crypto proved its ACTUAL utility—capital flight, sanctions resistance, sovereignty hedge. BTC dipped to $89K, recovered to $91.3K in <24 hours. Classic geopolitical vol catalyst.

FEAR & GREED REVERSAL: Index surged from 10 (Extreme Fear) to 40 (Neutral) in 48 hours—one of FASTEST sentiment reversals on record. Shorts positioned for further breakdown got absolutely CRUSHED. Liquidation cascade above $90K added rocket fuel.

THE SETUP FOR THIS WEEK: BTC needs to hold $90K-$91K as new support zone. Break above $92.5K triggers measured move to $95K-$98K. ETH leading altcoin strength (+7% week) = EARLY altseason signal confirming. SOL breaking ascending triangle targets $150. Dogecoin golden cross flashing—meme season igniting.

I. BREAKING HEADLINES & GEOPOLITICAL IMPACT

• U.S. MILITARY ACTION IN VENEZUELA - MADURO CAPTURED

The Event: Saturday Jan 3rd, U.S. carried out 'large scale' strike capturing Venezuelan President Nicolas Maduro and wife Cilia Flores per President Trump. AG Pam Bondi announced indictments in SDNY for drug trafficking/weapons charges. Trump: 'All Venezuelan military forces completely suppressed.'

Crypto Market Reaction: BTC initially dipped to $89K on geopolitical uncertainty, then REVERSED sharply to $91.3K as narrative shifted. Venezuela = poster child for Bitcoin adoption due to hyperinflation (citizens use BTC to escape currency collapse). Maduro's removal = potential increased Bitcoin adoption as population seeks stable money.

Market Intelligence: This reaction proves Bitcoin's ACTUAL use case beyond speculation—political instability + capital controls = BTC demand. Unlike 2022 Ukraine (BTC fell), this time market BOUGHT the geopolitical risk. Evolution of understanding crypto's role in sovereignty.

• FEAR & GREED INDEX: EXTREME FEAR → NEUTRAL IN 48 HOURS

The Move: Fear & Greed Index jumped from 10 (Extreme Fear) Friday to 40 (Neutral) Sunday—30-point swing in TWO DAYS. This represents one of fastest sentiment reversals in crypto history. Previous reading of 10 matched March 2020 COVID crash levels.

What It Means: Extreme Fear at 10 was THE bottom signal. Contrarian investors who bought fear got rewarded FAST. Now at 40 (neutral) = room for further upside before hitting greed territory (75+). This isn't euphoria—it's recovery.

Trading Intelligence: Fear spikes = buy signals confirmed again. Every time Fear drops below 20 this cycle, it marked local bottom within 1-3 days. Pattern holds. Next resistance: 50-60 range (neutral turning optimistic).

• SHORT SQUEEZE TRIGGERS MASSIVE LIQUIDATIONS

The Data: Crypto markets experienced liquidation flush above $90K. Shorts positioned for further breakdown to $85K got caught wrong-footed. When BTC broke $90K decisively, cascade of forced buy-backs (short covering) accelerated move to $91.3K.

Derivatives Positioning: SOL top 100 addresses, smart money, whale accounts were ALL net short entering weekend. Some groups (smart money, public figures) slowly flipping long—anticipating bullish January. This squeeze validates the flip in positioning.

• CIRCLE TREASURY: $750M USDC MINT ON SOLANA

The Injection: Circle began January 2026 with strategic $750M USDC mint on Solana blockchain—FIRST major stablecoin issuance of year. Completed in three transactions, signaling fresh liquidity entering network.

Why It Matters: Reinforces Solana's role as leading hub for high-volume financial activity. Provides 'dry powder' for DeFi lending protocols and DEXs. Enables sub-second settlement with deep liquidity. Vote of confidence from institutional players (Circle).

• DOGECOIN GOLDEN CROSS - MEME SEASON IGNITING

Technical Signal: Dogecoin flashed short-term golden cross (50-day MA crossing above 200-day MA). DOGE surged to $0.1516, driven by high trading volume. Broader meme coin market (DOGE, PEPE) saw significant gains as traders embrace 'meme season.'

Pattern Recognition: Memecoins lead final phase of altseason historically. If DOGE/PEPE pumping = signal retail FOMO returning. High-risk/high-reward but watch key support $0.14 for DOGE.

II. COMPREHENSIVE TECHNICAL ANALYSIS & WEEK AHEAD PLAYBOOK

BITCOIN (BTC) - Current: $91,300

Price Action: +4% week | +1.4% 24h | Two-week high

CHART PATTERN - Ascending Triangle Breakout:

• Pattern: BTC formed ascending triangle Dec 20 - Jan 4. Higher lows ($85K → $88K → $89K) with flat resistance $90K-$91K.

• Breakout: Sunday's move above $91K CONFIRMS bullish resolution. Volume spike on breakout = legitimate (not fakeout).

• Measured Move: Triangle height $6K ($85K to $91K) projects target $97K from breakout point.

• Validation: Need daily close above $90.5K to confirm. Break above $92.5K = acceleration phase begins.

Technical Indicators:

• RSI (Daily): 58.7 (healthy momentum, not overbought). Room to 70+ before overheated.

• MACD: Bullish crossover confirmed. Histogram expanding positive = momentum accelerating.

• Bollinger Bands: Friday's squeeze RESOLVED. Price now riding upper band ($92.5K) = strong uptrend.

• Volume: $52B (24h), elevated 35% from recent average. Confirms genuine demand.

Key Levels This Week:

• Support Zone: S1: $90,000 (must hold as new floor) | S2: $88,600 (20-day MA) | S3: $85,000 (breakdown invalidation)

• Resistance Zone: R1: $92,500 (Bollinger upper, immediate test) | R2: $95,000-$96,000 (measured move, rebound high from Nov 20) | R3: $98,000-$100,000 (psychological, major)

THIS WEEK'S BTC TRADING PLAN:

BULLISH SCENARIO (70% probability): Hold $90K support → Break $92.5K with volume → Target $95K-$96K by Friday. Strategy: Long $90.5K-$91.5K, stop $89.5K, targets $95K/$98K. R/R: 4:1 to first target.

BEARISH SCENARIO (30% probability): Rejection at $92K → Retest $90K → Break below triggers flush to $88K-$89K. Strategy: If daily close <$89.5K, exit longs, wait $85K-$87K retest.

CATALYST WATCH: ETF flows Monday (critical after 2-day break), CPI data Jan 13, FOMC Jan 27-28. Any positive surprise = breakout fuel.

ETHEREUM (ETH) - Current: $3,150

Price Action: +7% week | +1% 24h | Relative strength leader

CHART PATTERN - Bullish Flag Continuation:

• Setup: ETH broke $3K decisively Friday, consolidated $3,100-$3,150 over weekend. Classic bull flag after impulse move.

• Momentum: Weekly chart shows bullish engulfing candle (confirmed Friday). Strong conviction signal.

• Outperformance: ETH +7% week vs BTC +4% = RELATIVE STRENGTH = Altseason confirmation signal.

Technical Indicators:

• RSI: 61.3 (bullish momentum building, not extended)

• MACD: Histogram strongly positive and expanding = trend acceleration

• EMAs: Price above 20/50-day EMAs. 100/200-day ($3,368/$3,387) = major overhead but approaching

• Volume: $31.4B in 24h (significantly elevated). Real accumulation occurring.

Key Levels This Week:

• Support: S1: $3,100 (critical—MUST hold) | S2: $3,000 (psychological reclaim zone) | S3: $2,960 (20-day EMA)

• Resistance: R1: $3,200 (immediate test this week) | R2: $3,300-$3,350 (measured move target) | R3: $3,500 (Elliott Wave projection)

THIS WEEK'S ETH TRADING PLAN:

BULLISH SCENARIO (65% probability): Hold $3,100 → Break $3,200 → Target $3,300-$3,350. Strategy: Long $3,120-$3,150, stop $3,050, targets $3,300/$3,500. R/R: 3.5:1.

BEARISH SCENARIO (35% probability): Rejection $3,200 → Retest $3,000 → Risk of breakdown to $2,900. Strategy: If close <$3,050, exit, wait $2,900-$3,000 retest.

CATALYST: Fusaka upgrade approaching Q1 + ETH ETF institutional interest surging (BitMine model spreading) = fundamental tailwinds.

SOLANA (SOL) - Current: $132

Price Action: +8% week | +1.6% 24h | Breaking key resistance

CHART PATTERN - Ascending Triangle + Bullish Divergence:

• Pattern: SOL formed ascending triangle Dec-Jan. Flat resistance $130-$132, rising support $123 → $126 → $129.

• Bullish Divergence: 2-day chart shows lower low in price (Nov 21 - Dec 17) while RSI made HIGHER low = reversal signal.

• Breakout Confirmation: Two-day close above $129 confirms strength. Sunday's move to $132 validates. Path opens toward $150.

• Bearish Risk: 100-EMA approaching death cross below 200-EMA on 2-day chart. Needs momentum to avoid.

Fundamental Strength:

• ETF Flows: SOL ETFs have NOT posted single week net outflows since launch. Recent week +$13.14M, cumulative $755.77M.

• Circle USDC: $750M mint signals institutional confidence in SOL infrastructure.

• January Seasonality: SOL historically strong in January (avg +59%, median +22%). Pattern sharpens after red December.

Key Levels This Week:

• Support: S1: $129 (breakout level, must hold) | S2: $123-$124 (strongest supply cluster) | S3: $120 (breakdown invalidation)

• Resistance: R1: $135 (immediate) | R2: $140 (psychological) | R3: $150 (measured move target) | R4: $171 (if momentum sustains)

THIS WEEK'S SOL TRADING PLAN:

BULLISH SCENARIO (60% probability): Hold $129 → Break $135 → Target $140-$150. Strategy: Long $130-$133, stop $127, targets $140/$150. R/R: 4:1.

BEARISH SCENARIO (40% probability): Fail $135 → Retest $129 → Break triggers flush to $123-$124. Strategy: If close <$128, exit, wait $120-$123.

RISK MANAGEMENT: SOL more volatile than BTC/ETH. Size positions accordingly (50% of normal). Watch derivative sentiment—smart money flipping long.

BINANCE COIN (BNB) - Current: $862

Price Action: +1.2% 24h | Consolidating strength

Technical Setup:

• Pattern: BNB forming symmetrical triangle. Consolidation $850-$870 range.

• Indicators: RSI 54 (neutral). MACD flat but showing early bullish divergence.

• Relative Performance: BNB holding better than many altcoins. Utility + burns support floor.

THIS WEEK'S BNB TRADING PLAN:

STRATEGY: Wait for triangle breakout. Long if breaks $870 with volume → Target $900-$920. Stop <$850. Avoid until direction clear.

ALTCOINS BREAKING OUT - HIGH-CONVICTION SWING TRADES

DOGECOIN (DOGE) - Golden Cross Confirmed

Current: $0.1516 | +4% 24h | High volume

Setup: Short-term golden cross (50 MA > 200 MA). Strong volume confirms. Meme season igniting as retail returns.

Levels: Support $0.14 (must hold) | Resistance $0.16 → $0.18 | Target $0.20 if meme frenzy accelerates

Strategy: Swing trade only. Long $0.15-$0.152, stop $0.138, target $0.18/$0.20. HIGH RISK—size 25% normal position.

CARDANO (ADA) - Sustained Momentum

Current: $0.36 | +7% week | Outperforming

Catalysts: Midnight mainnet Q1 launch, Leios upgrade (thousands TPS), NIGHT token >$1B market cap

Levels: Support $0.34 | Resistance $0.38 → $0.42 | Target $0.45-$0.50 medium-term

Strategy: Position trade. Long $0.35-$0.36, stop $0.33, target $0.42/$0.45. Fundamentals strong.

PEPE - Meme Coin Leader

Current: $0.00000823 | +10.6% 24h | Volume surging

Setup: PEPE + PENGU leading meme rally. Historical pattern: memes pump in final altseason phase. Retail FOMO signal.

Strategy: SPECULATION ONLY. Tiny position, tight stops. Long current, stop -15%, target +50-100%. Could go parabolic OR dump instantly.

III. CRYPTO TWITTER SENTIMENT - WHAT SMART MONEY SAYS

Lyn Alden (@LynAldenContact) - Macro Strategist: "Venezuela situation demonstrates Bitcoin's ACTUAL utility beyond speculation—capital flight during political instability. Market bought the dip aggressively. This behavior didn't exist in 2022. Market maturing in real-time."

Miles Deutscher (@milesdeutscher) - Altcoin Specialist: "ETH +7% week vs BTC +4% = relative strength confirming. SOL +8%, ADA +7% = altseason rotation FINALLY beginning. Not full-blown yet but early signs clear. Layer-2s + fundamentally strong alts outperforming."

Benjamin Cowen (@intocryptoverse) - Cycles Expert: "Fear & Greed 10 → 40 in 48 hours = one of fastest sentiment reversals recorded. Historically these mark regime change. Not saying moon imminent, but bottoming process likely complete. Risk/reward favors longs."

Raoul Pal (@RaoulGMI) - Real Vision CEO: "We're exiting the 'boring middle' faster than expected. January typically sets tone for quarter. If BTC reclaims $95K-$100K this month, Q1 could deliver. Still maintain $100K grind thesis but timing may accelerate."

CONSENSUS VIEW:

1. Bollinger squeeze resolution = BULLISH momentum building

2. Fear → Neutral sentiment shift = bottoming confirmed

3. ETH/SOL relative strength = early altseason rotation

4. Venezuela catalyst = Bitcoin utility validation

5. This week $90K-$92.5K range critical for momentum

IV. MAJOR HEADLINES

🇻🇪 U.S. Military Operation Captures Venezuela's Maduro | Trump announced 'large scale' strike Saturday capturing President Maduro + wife. AG indictments SDNY for drug trafficking. Crypto markets initially dipped, then rallied as Bitcoin's sovereignty use case validated. Venezuela citizens heavy BTC users due to hyperinflation.

📈 Fear & Greed Index: Fastest Reversal in History | Index jumped from 10 (Extreme Fear) to 40 (Neutral) in 48 hours—30-point swing representing one of fastest sentiment reversals recorded. Contrarian signal paid off FAST for buyers at extreme fear.

💰 Circle Mints $750M USDC on Solana to Start 2026 | Strategic injection first major stablecoin issuance of year. Three transactions total. Reinforces SOL's role as high-volume financial activity hub. Provides DeFi 'dry powder' for protocols/DEXs.

🐕 Dogecoin Golden Cross Sparks Meme Season Rally | DOGE flashed short-term golden cross, surged to $0.1516 on high volume. Broader meme market (PEPE +10.6%, PENGU +12%) signaling retail FOMO returning. Historically memes lead final altseason phase.

⚖️ CLARITY Act Nears Passage - Regulatory Clarity Coming | Digital asset market structure bill targeting early 2026 passage before midterm campaigns. Would provide comprehensive regulatory framework. Institutions waiting for clarity before larger deployments.

🏦 Institutional Bitcoin Accumulation Continues Despite Volatility | Fidelity notes countries adding BTC to national reserves (Brazil, Kyrgyzstan). JPMorgan: industry has growth potential despite correction from $4T to $3T market cap. BlackRock, Fidelity highlighting enhanced crypto role in 2026 outlooks.

🔒 Privacy Coins Surge: Monero, Zcash Gaining Attention | Coinbase predicts rising demand for anonymous cryptocurrencies (XMR, ZEC) amid heightened data privacy concerns. Institutional research highlighting privacy narrative for 2026.

📊 Altcoin Season Signals Emerging But NOT Full Rotation Yet | ETH +7% week, SOL +8%, ADA +7% = early signs. But selective—not broad market pump. B2BinPay analysts: 'Investors prioritizing small group of liquid tokens, not wholesale rotation.' Quality > quantity.

⚠️ Coordinated Wallet Drains Hit Users - Security Alert | Reports of sophisticated phishing attacks targeting crypto wallets. Reminder: NEVER share seed phrases, verify URLs carefully, use hardware wallets for large holdings. Security hygiene critical.

V. INTERESTING AI × CRYPTO DEVELOPMENT

Ethereum & Solana: Setting Stage for 2026 DeFi Renaissance

The Thesis: After DeFi's explosive 2020-2021 growth followed by 2022-2023 contraction, Ethereum and Solana are positioning infrastructure for major DeFi resurgence in 2026. Both chains made critical upgrades and attracted institutional capital positioning them as complementary leaders.

Ethereum's Institutional Foundation:

• Fusaka Upgrade: Approaching Q1 enhances scalability, increases throughput. L2s (Arbitrum, Optimism, Base) benefit directly from improved data availability.

• Institutional Staking: BitMine's 408K ETH stake (3.41% supply) demonstrates corporate confidence. Made in America Validator Network (MAVAN) launching early 2026.

• RWA Tokenization: JPMorgan tokenized money market fund on Ethereum validates institutional-grade infrastructure. BlackRock BUIDL fund crossed $100M dividends.

Solana's Speed + Capital:

• Circle's Vote: $750M USDC mint signals confidence in high-speed settlement. Sub-second finality with deep liquidity = payments layer of 2026.

• DEX Dominance: Solana DEXs overtook top CEXs with $1.6T volume despite SOL price stagnation. Network usage translating to stronger metrics.

• ETF Inflows: Zero weeks of net outflows since launch. Cumulative $755.77M demonstrates sustained institutional demand.

Why It Matters for Trading:

DeFi renaissance means:

• Layer-2 tokens (ARB, OP, MATIC) become HIGH CONVICTION plays

• DeFi blue chips (UNI, AAVE, MKR) see renewed interest

• SOL ecosystem tokens (JUP, ORCA, RAY) benefit from liquidity surge

• RWA-focused tokens (ONDO, TRU, LINK) capture tokenization wave

Investment Angle: Rather than chasing meme pumps, smart money positioning in DeFi infrastructure for sustainable Q1-Q2 run. ETH + SOL complementary (institutional security vs. retail speed). Both likely outperform isolated plays.

VI. WEEK AHEAD - ACTIONABLE TRADING PLAYBOOK

THE SETUP GOING INTO MONDAY:

Sunday's Action Summary: BTC broke ascending triangle bullish ($91.3K), ETH showing relative strength ($3,150, +7% week), SOL breaking key resistance ($132, +8% week). Fear & Greed reversed 10 → 40 in 48 hours. Geopolitical catalyst (Venezuela) triggered short squeeze. Bollinger squeeze resolved EXACTLY as predicted Friday.

THIS WEEK'S CRITICAL LEVELS:

Bitcoin:

• MUST HOLD: $90,000 as new support floor

• BREAKOUT: $92,500 triggers acceleration to $95K-$98K

• INVALIDATION: Daily close <$89,500 = retest $85K-$87K

Ethereum:

• MUST HOLD: $3,100 critical support

• BREAKOUT: $3,200 opens path to $3,300-$3,500

• INVALIDATION: Close <$3,050 = retest $3,000 or lower

Solana:

• MUST HOLD: $129 breakout level

• BREAKOUT: $135 accelerates to $140-$150

• INVALIDATION: Close <$128 = retest $123-$124

MACRO CATALYSTS THIS WEEK:

• Monday: ETF flow data after 2-day break (CRITICAL—will show if institutions buying weekend strength)

• Wednesday: FOMC minutes release from December meeting

• Friday: Weekly options expiry (potential pinning around key strikes)

HIGHEST CONVICTION TRADES:

1. BTC Long: Entry $90.5K-$91.5K | Stop $89.5K | Target $95K/$98K | Size: FULL | R/R: 4:1

2. ETH Long: Entry $3,120-$3,150 | Stop $3,050 | Target $3,300/$3,500 | Size: FULL | R/R: 3.5:1

3. SOL Long: Entry $130-$133 | Stop $127 | Target $140/$150 | Size: 50% (volatile) | R/R: 4:1

4. ADA Swing: Entry $0.35-$0.36 | Stop $0.33 | Target $0.42/$0.45 | Size: 30% | R/R: 3:1

5. DOGE Speculation: Entry $0.15-$0.152 | Stop $0.138 | Target $0.18/$0.20 | Size: 25% | R/R: 3:1

WE WERE RIGHT! CONGRATULATIONS REKT READERS!! THE SQUEEZE RESOLVED. THE BOTTOM CONFIRMED. MOMENTUM BUILDING.

DISCLAIMER: This newsletter provides market analysis and trading intelligence for informational and educational purposes only. It is NOT financial advice. Cryptocurrency trading carries substantial risk of loss. Past performance does not guarantee future results. Always conduct your own research, understand the risks, and never invest more than you can afford to lose. The Rekt Reports and its authors are not registered financial advisors. Trade responsibly.