Bitcoin ETFs Surge Amidst Bullish Rally Above $97K
By: Isha Das
Bitcoin’s market landscape has witnessed substantial activity with Bitcoin exchange-traded funds (ETFs) experiencing a remarkable surge in inflows. Over the past three days, spot Bitcoin ETFs have attracted over $1.7 billion, marking a significant recovery from earlier January outflows. This inflow reflects a growing bullish sentiment as Bitcoin soared to two-month highs, surpassing $97,000. The most notable inflow recorded was $843.6 million in a single day, the largest for 2026 so far, according to data from crypto research platform SoSoValue. This movement signifies a potential rebound in the crypto market, offsetting prior outflows and indicating a renewed investor interest.
Despite this positivity, the market faces some challenges as highlighted by Glassnode. The analytics firm reports that Bitcoin has approached a familiar problem area between $93,000 and $110,000, capping rallies since November. Long-term holders (LTH) have been repeating patterns from past cycles, utilizing this range as a point of significant distribution, which leaves the market with the task of absorbing this overhead supply. This "dense cluster" serves as a critical test; BTC must sustain growth beyond these levels to confirm a broader trend reversal.
An essential metric under observation is the short-term holder (STH) cost basis, now at $98,300. Sustained trading above this figure would indicate robust demand, capable of maintaining short-term buyers in profit and managing overhead supply. However, on-chain data shows long-term holders remain consistent sellers, albeit at a slower pace, suggesting some degree of profit-taking still persists. The critical factor moving forward will be the market's ability to absorb this supply, ensuring prices remain above long-term averages to prevent a potential capitulation, reminiscent of past market downturns.
Market indicators also suggest a notable change in off-chain dynamics. Institutional balance-sheet flows, which faced significant outflows across various financial entities, have now stabilized. Spot Bitcoin ETFs are now leading renewed buying interest, with off-chain signals pointing towards more constructive trends. However, the market remains sensitive to liquidity conditions, indicating that recent rallies were partially driven by short liquidations rather than sustained demand increases. As future market movements are closely tied to derivatives positioning and liquidity conditions, ongoing investor confidence will be critical to sustaining upward momentum.
