Bitcoin Rebounds Above $97,000 as ETF Inflows Surge Past $1.5 Billion in January

Strong ETF Demand Drives Price Recovery

Bitcoin's price has climbed back above $97,000 this week, supported by sustained capital inflows into US spot Bitcoin exchange-traded funds that suggest a structural shift in demand following months of sideways trading ^[1].

Since the beginning of the year, US spot Bitcoin ETFs have collectively attracted nearly $1.5 billion in net inflows, according to data cited by Bloomberg ETF analyst Eric Balchunas ^[1]. This figure reflects multiple days of positive creation activity amid renewed interest from larger allocators, following a period of muted ETF flows at the end of 2025 ^[1].

Wednesday alone saw ETF buyers account for $843.6 million in net inflows, bringing the weekly total to $1.07 billion ^[1]. Balchunas noted in a post on X that the pattern of ETF demand "suggests that maybe the buyers have exhausted the sellers," referring to Bitcoin's breakout from prolonged consolidation around the $88,000 level ^[1].

Price Correction Tests Key Support Levels

Despite the positive momentum, Bitcoin sold off at Thursday's Wall Street open, with the price shedding over 1% from the daily open and hitting lows of $95,563 on Bitstamp ^[2]. The weakness meant that Bitcoin joined oil in diverging from stocks and precious metals, which were up on reports of de-escalating geopolitical tensions between the US and Iran ^[2].

Market participants are now watching critical support levels during a potential correction within the local uptrend. "Critical for the bulls to hold the $94K region going forward. Any moves back down that level would not make for a pretty look," wrote Daan Crypto Trades in a post on X after what he called a "solid breakout" ^[2].

The analyst also referenced the daily 200-day exponential moving average (EMA), currently at $99,555, which rejected price in November before a large drop ^[2]. The weekly close target was set at $93,500, the site of the 2025 yearly open ^[2].

Short-Term Holders Take Profits

Onchain analytics platform CryptoQuant revealed that newer Bitcoin investors have already been tempted to sell as the price hit two-month highs ^[2]. Short-term holders, defined as entities holding for up to six months, sent 40,000 BTC to exchanges over a 24-hour period, with approximately 37,800 BTC sent in profit compared to when it last moved onchain ^[2].

"STHs remain clearly impacted by the recent correction, and it seems that more upside and stronger confirmation will be needed to rebuild confidence and generate enough unrealized profits to encourage them to hold rather than sell," wrote CryptoQuant contributor Darkfost in a blog post ^[2].

Separate data from CryptoQuant contributor Axel Adler Jr. put the aggregate cost basis for the short-term holder cohort at $99,600, reinforcing that area as a potential future resistance point ^[2].

Cyclical Concerns and Structural Changes

The current rally comes at a time that has historically been more challenging for Bitcoin. Market observers often point to Bitcoin's four-year cycles aligned with halving events, which have typically seen prices peak 12 to 18 months after each supply reduction—a pattern suggesting the market may already be past its cyclical high ^[1].

According to market maker Wintermute, a structural shift in Bitcoin markets may be required to support a broader recovery heading into 2026 ^[1]. In a recent outlook, the firm stated that a market-wide rebound would likely depend on continued accumulation by exchange-traded funds and digital asset treasury companies, or an expansion of their mandates beyond Bitcoin to other digital assets ^[1].