Bitcoin Surges Past $97,000 as Traders Debate Sustainability of Bull Market Rally

Sharp Rally Fueled by Institutional Investment

Bitcoin surged to its highest levels in more than 60 days this week after posting a 5.5% gain on Wednesday, breaking above the $97,000 threshold ^[1]. The rally was supported by substantial institutional buying, with spot Bitcoin exchange-traded funds recording $840 million in inflows on Monday and Tuesday ^[1], including $753.8 million on Tuesday alone according to Farside Investors data ^[2].

The cryptocurrency's strong performance has prompted speculation about whether the bull market has returned after a two-month downturn. Crypto sentiment platform Santiment noted that retail traders may experience fear of missing out if Bitcoin begins "teasing $100k in the next few days" ^[2].

Derivatives Markets Signal Caution

Despite the price rally, professional traders have yet to embrace a bullish outlook. The BTC options delta skew metric currently stands at 4%, unchanged from one week earlier, indicating that put (sell) options continue to trade at a premium ^[1]. This suggests stable risk perception despite Wednesday's advance above $96,000 ^[1].

When institutional investors and market makers grow optimistic, the skew typically turns negative to reflect increased demand for neutral-to-bullish option strategies ^[1]. The recent price movement instead caught bears off guard, triggering $370 million in liquidations of leveraged short positions over two days—the highest total since October 2025 ^[1].

Technical Analysis Points to Key Resistance Levels

The upsloping 20-day exponential moving average at $91,418 and the relative strength index near the overbought zone indicate that bulls maintain control ^[2]. A close above the $96,848 level could clear the path for a rally to $100,000 and subsequently to $107,500 ^[2].

However, the cryptocurrency still trades 23% below its all-time high of $126,219 ^[1]. The first support on the downside sits at the breakout level of $94,789, followed by the 20-day EMA ^[2].

Geopolitical Tensions and Risk-Off Environment

Several factors are limiting Bitcoin's upside potential. Geopolitical risks intensified after protests in Iran prompted military threats from US President Donald Trump, including a potential additional 25% import tariff on countries "doing business with the Islamic Republic of Iran" ^[1]. Concerns have emerged that US relations with China and India could deteriorate if the proposal advances ^[1].

Additionally, the Trump administration's intention to gain control of Greenland has raised investor concerns. German Defense Minister Boris Pistorius has reportedly offered assistance to Denmark in the event of a hostile takeover, according to Politico ^[1].

Traditional Markets Reflect Broader Uncertainty

Bitcoin's rally contrasts sharply with continued weakness in the tech-heavy Nasdaq Index, which has repeatedly failed to reclaim the 26,000 level last seen in early November 2025 ^[1]. The index declined 1.6% this week ^[1].

Yields on the US two-year Treasury fell to 3.51% on Wednesday, indicating traders are accepting lower returns in exchange for government-backed bond safety ^[1]. This shift is particularly notable given that the latest US consumer price inflation index stood at 2.7% year over year, above the Federal Reserve's target ^[1].

Warren Buffett, chairman and former CEO of Berkshire Hathaway, reportedly warned that the lack of clarity surrounding artificial intelligence's future direction is concerning. Berkshire's cash position climbed to a record $381.7 billion, up from $170 billion one year prior ^[1].

Competing Views on Market Cycle

Market participants remain divided on Bitcoin's trajectory. Crypto analyst Midas suggested in a post on X that Bitcoin's current structure follows the 2020-2021 cycle, potentially reaching $150,000 if history repeats ^[2].

Conversely, global investment manager VanEck stated in its Q1 2026 Outlook that Bitcoin's four-year cycle broke in 2025, supporting "a more cautious near-term outlook over the next 3-6 months" ^[2]. However, select analysts from the company remained "more constructive on the immediate cycle" ^[2].

As uncertainty builds across traditional and crypto markets, the question remains whether Bitcoin has decisively ended its two-month bear market or if the rally represents a temporary reprieve in a challenging macroeconomic environment.