Bitcoin's $98K Surge: Is the ETF Inflow Trend the Main Character?

The immediate driver behind Bitcoin's surge to nearly $98,000 is clear: a massive wave of institutional demand hitting the ETF market. On January 13, U.S. spot Bitcoin ETFs saw a net inflow of $753.73 million, their largest daily figure in over three months. This isn't just a blip; it's a powerful, concentrated signal that traditional capital is flowing into the asset. The scale was significant, with major funds like Fidelity's FBTC and BlackRock's IBIT leading the charge.

This inflow surge follows a period of flat trading during the holiday season, creating a perfect setup for a technical and sentiment catalyst. The market had been stuck, with Bitcoin unable to break above the $97,000 mark since November. The ETF money provided the necessary momentum to break that ceiling, triggering a broader risk-on rally that also lifted Ethereum and XRP.

The macro environment made this rally possible. The inflows coincided with improved liquidity conditions, fueled by a lower inflation report for December 2025. This data eased fears of aggressive monetary tightening, making risk assets like cryptocurrencies more attractive. As one analyst noted, these improved conditions generally favor risk assets like cryptocurrencies.

Put simply, the recent price action is a direct reaction to these combined forces. The record ETF inflow provided the immediate fuel, while the favorable macro backdrop removed a key overhang. This created a clear catalyst where the market's attention-and capital-could converge. For now, the ETF trend is the main character in Bitcoin's story.

Market Attention and Sentiment Gauge

The broader crypto market is extending the rally, confirming that Bitcoin's move is not an isolated event. Total market capitalization has climbed to a multi-month high of $3.38 trillion, with all of the top-10 cryptocurrencies trading higher today. This synchronized strength suggests the sentiment shift is catching on, driven by the same ETF inflow and macro tailwinds that lifted Bitcoin.

However, a major technical overhang now looms. Glassnode analysts have identified a dense cost-basis cluster between $93,000 and $109,000 as a substantial overhead supply zone. This represents a wall of long-term holder supply that any sustained move higher must absorb. The market has already tested this zone, breaking above the $95,000 ceiling that capped gains since November. The next test will be whether buyers can push through this resistance without triggering a wave of profit-taking.

Sentiment is shifting, but not yet to extremes. The Crypto Fear and Greed Index has transitioned toward the "neutral" zone for the first time in weeks, after spending much of December in "extreme fear." This is a key gauge of whether the market is approaching "extreme greed" levels, which could signal overheating. The move from fear to neutral suggests the worst-case sentiment has lifted, but it also means the market is not yet in a state of euphoric buying that often precedes a pullback.

The bottom line is one of cautious optimism. The rally is broadening, and sentiment is improving, which supports the uptrend. Yet the technical overhead and the index's position in neutral territory indicate the market is still in a fragile phase. The next major test will be whether the ETF inflow trend can continue to fuel a break above that dense supply zone, or if it stalls and triggers a wave of liquidations. For now, the trend is up, but the path isn't without friction.

Catalysts and Risks: What to Watch Next

The market's momentum is now squarely dependent on the ETF inflow trend. For the rally to sustain, this capital must keep flowing. The cumulative total has already reached $57.27 billion, a massive base. But the key question is whether this can continue at a high rate. The recent surge to a net inflow of $753.73 million on January 13 shows the potential, but it also highlights the volatility. The market's price changes are heavily reliant on these flows, as a VAR model indicates yesterday's price moves significantly influence today's (coefficient: 0.802). This creates a feedback loop where strong inflows drive prices higher, which in turn attracts more attention and potentially more inflows.

The main headline risk is macro uncertainty. A major event to watch is the U.S. Supreme Court's pending rulings on cases related to President Trump's global tariffs. As one report notes, a mysterious trader bought millions ahead of Wednesday's Supreme Court tariff ruling. This suggests the market is pricing in potential trade policy shifts that could disrupt global liquidity and risk appetite. Any ruling that signals a new trade war or significant economic friction could quickly reverse the improved conditions that have supported the rally.

Technically, the path ahead is clear but challenging. The market has broken above the $97,000 ceiling that capped gains since November. The next major test is absorbing the dense cost-basis cluster between $93,000 and $109,000, a substantial overhead supply zone. The rally has already triggered heavy liquidations, with over $820 million in crypto derivatives liquidations in the past 24 hours. This shows the market is not without friction, and a failure to push decisively through that supply zone could trigger a wave of short-covering and profit-taking.

The bottom line is a story of fragile momentum. The ETF inflow trend is the main character, providing the fuel. But the plot is being complicated by macro headlines and technical resistance. For the uptrend to continue, the market needs to see sustained, high-volume ETF flows that can absorb that overhead supply. Any stumble in the inflow data or a negative macro catalyst could quickly derail the setup. Watch the daily ETF flow numbers and the Supreme Court docket for the next major moves.