Bitcoin has found its footing around $91,000 following a significant sell-off earlier this week, which resulted in over $865 million in liquidations in the crypto market. This swift recovery suggests resilient demand for the cryptocurrency, as noted by digital asset investment firm ZeroCap.
The downturn was largely fueled by escalating trade tensions between the United States and Europe. President Donald Trump recently threatened to impose tariffs up to 25% on imports from several European nations starting February 1, unless they withdrew their objections to his contentious Greenland policy.
This latest round of rhetoric from Trump coincided with reports of a “very good phone call” with the NATO Secretary-General about Greenland, heightening concerns in the financial markets.
Despite the current headwinds, analysts at ZeroCap characterized the recent market resilience as indicative of an “early-stage risk-on rotation.” Notably, there were record spot Bitcoin ETF inflows last week, amounting to the highest levels seen in three months, reinforcing the notion of strong institutional demand.
During the week of January 12-16, U.S. spot Bitcoin ETFs recorded net inflows of $1.42 billion, with BlackRock’s IBIT leading the charge at $1.035 billion. This uptick in ETF demand demonstrates that institutional investors remain hopeful despite broader market volatility.
However, caution prevails among some market participants. Sean Dawson, head of research at on-chain options platform Derive, pointed out a lowering trend in the 25-delta skew, signaling that investors are seeking downside protection through put options.
Market Volatility Drivers
Three critical factors are likely to sustain volatility in the crypto markets: the ongoing U.S.-Europe trade dispute over Greenland, alack of regulatory clarity stemming from the CLARITY Act, and the pending Supreme Court ruling on Trump’s global tariff strategy. Farzam Ehsani, CEO of crypto trading platform VALR, warned that historical patterns show tariff threats and retaliatory measures can create significant headwinds for risk assets, including digital currencies.
Analyst Predictions for Bitcoin’s Path
Market analyst Benjamin Cowen has expressed a tempered outlook for Bitcoin, predicting it will continue to experience a gradual decline before entering a bullish phase. Cowen believes Bitcoin is on track to hit $110,000 eventually, although he cautions that the currency will first need to rally and close above its 50-week moving average for a significant reversal to unfold.
To handle the unpredictable trading environment effectively, Cowen maintains a partial investment in Bitcoin, which he believes will shield him from making emotional trading decisions. He subscribes to a time-based investment strategy that aligns with Bitcoin’s historical four-year cycle, suggesting that the upcoming accumulation window may open in late 2026.
Cowen refrained from setting absolute price targets, recognizing the criticism that often follows incorrect predictions. While current market trends appear bearish, he anticipates a shift in sentiment by the fourth quarter of 2026, with Bitcoin trading at around $91,000 as per the latest data.
