The cryptocurrency market is experiencing a significant resurgence this week, with Bitcoin (BTC) prices soaring above the $97,000 mark for the first time in over 60 days. This rally has been largely attributed to impressive inflows into U.S. spot Bitcoin exchange-traded funds (ETFs), which recorded $844 million in net inflows on January 14, marking the highest daily total since October 7 of last year.
This surge surpassed the previous day’s record of $754 million in inflows, showcasing a robust recovery in institutional interest. In just three trading days, spot Bitcoin ETFs attracted a staggering total of $1.71 billion, with eight out of twelve ETFs reporting positive inflows.
The BlackRock spot Bitcoin ETF, identified by the ticker IBIT, took the lead in this upswing with a remarkable $648 million influx, followed by Fidelity’s FBTC, which contributed $125.4 million. Notably, other notable funds like Ark & 21Shares’ ARKB and Grayscale also enjoyed positive inflows, indicating a widespread recovery across the sector.
Following this dramatic influx of funds, Bitcoin’s price observed a commendable 5.5% increase, elevating its trading value to $96,447, although still lingering 23% below its all-time high of $126,219.
Institutional Interest Reawakens
Market analysts attribute the recent inflows to a return of institutional demand for Bitcoin. Nick Rick, a director at LVRG Research, elaborated that investor appetite is resurging as capital is replenished in the wake of year-end caution.
This price rally has caught many short sellers off guard, leading to liquidations totaling about $370 million within just two days—a clear indication of the volatility that defines the crypto market.
Caution Among Traders
While the inflow data is promising, traders in derivatives markets remain cautious. Options data indicates that the BTC options delta skew is resting at 4%, which is consistent with levels from the previous week. Additionally, put options are still trading at a premium compared to call options, suggesting skepticism regarding Bitcoin sustaining its gains above the critical $100,000 threshold.
Despite the ongoing rally, many professional traders do not share an overly bullish outlook. Current options market activity reveals doubts about Bitcoin’s potential to reach $105,000 in the foreseeable future.
Other cryptocurrencies are also benefitting from this inflow trend. Spot Ethereum ETFs recorded $175 million in inflow on the same day, while spot Solana ETFs added $23.5 million. Investor sentiment is optimistic; Kronos Research’s CIO, Vincent Liu, believes that continued net inflows into crypto ETFs will cultivate a favorable environment for price growth across the sector.
Amid these movements, macroeconomic indicators are also shifting—U.S. two-year Treasury yields dipped to 3.51% while the Nasdaq Index declined by 1.6%. This broader economic context could influence investor behavior in the cryptocurrency sphere in the near term.
