Bitcoin ETF Flow Reversals and Market Bottom Signals in Early 2026

The crypto market's late-2025 selloff has left investors grappling with a critical question: Is this a temporary correction or a deeper bearish trend? Recent analysis from JPMorgan and on-chain data suggests the former. As ETF outflows stabilize and key metrics align with early bottoming patterns, the case for a strategic buying opportunity in Bitcoin grows compelling.

JPMorgan's Stabilization Signals

JPMorgan has identified a pivotal shift in Bitcoin's ETF dynamics. In early January 2026, net outflows for Bitcoin and Ether transitioned from a one-way selling pressure seen in late 2025 to a balanced flow regime, characterized by alternating days of inflows and outflows. This "tactical rotation" indicates reduced panic selling and a return to normal market behavior. The bank further notes that institutional and sophisticated retail investors have largely completed position reductions, diminishing the pool of forced sellers.

A critical factor in this stabilization is MSCI's decision to retain Bitcoin and crypto treasury companies in its global equity benchmarks. By avoiding forced liquidations, this move reduces near-term downward pressure on prices. JPMorgan's analysis concludes that the correction reflects a consolidation phase rather than renewed downside momentum, with stabilization patterns consistent with early market bottoms.

On-Chain Data Validates the Narrative

On-chain metrics corroborate JPMorgan's findings. The Short-Term Spent Output Profit Ratio (SOPR) for Bitcoin rebounded near the critical 1.0 threshold in late November 2025, signaling that short-term holders are once again in profit. This recovery suggests liquidity shifts and momentum exhaustion rather than a fundamental breakdown. Meanwhile, long-term holders remain steadfast, with no signs of large-scale selling.

The SOPR rebound is particularly significant because it historically precedes bullish reversals. When short-term holders return to profitability, it often triggers a cascade of buying activity as traders rebalance portfolios. Additionally, the reversal of ETF flows from selling to buying in Ethereum and Solana underscores a broader market stabilization. Analysts like Farzam Ehsani of VALR project Bitcoin could reclaim the $100,000–$120,000 range by Q2 2026, with an all-time high possible by midyear.

ETF Outflows: A Complex Picture

While JPMorgan and on-chain data highlight stabilization, the late-2025 ETF outflows remain a point of scrutiny. U.S.-listed spot Bitcoin ETFs recorded a record $4.57 billion in net outflows over two months, driven by year-end de-risking, profit-taking, and shifting institutional exposures. For example, a single session in late February 2025 saw $1.11 billion in redemptions, while December 15, 2025, witnessed $357.6 million in outflows as funds trimmed exposure ahead of reporting periods.

However, these outflows must be contextualized. Bitcoin's price dip below $80,000 in late 2025 has been interpreted by figures like Arthur Hayes (former BitMEX CEO) as a potential cycle floor. The Network Value to Transactions (NVT) ratio-a valuation metric-has also reached historically low levels, suggesting undervaluation. Furthermore, the 86% probability of a Federal Reserve rate cut in December 2025 could stimulate demand for risk assets, including Bitcoin.

Strategic Buying Opportunity

The interplay of these factors creates a compelling case for a strategic buying opportunity. ETF outflows, while significant, reflect macroeconomic caution rather than a loss of faith in Bitcoin's long-term value. The stabilization of flows, coupled with on-chain metrics and institutional behavior, indicates a market nearing equilibrium.

Historical patterns reinforce this view. Bitcoin has repeatedly resumed upward trajectories after periods of intense selling and volume capitulation. For investors with a multi-year horizon, the current price levels offer a chance to accumulate at discounted valuations, particularly as macroeconomic tailwinds (e.g., Fed easing) and structural demand (e.g., ETF inflows in early 2026) align.

Conclusion

The convergence of JPMorgan's stabilization signals, on-chain data, and macroeconomic indicators paints a nuanced but optimistic picture. While late-2025 outflows reflect short-term caution, they also highlight a market nearing a cyclical bottom. For disciplined investors, this represents a rare opportunity to position for Bitcoin's next leg higher. As the Fed's policy pivot looms and institutional confidence stabilizes, the stage is set for a 2026 rebound.