Bitcoin ETFs Surge as BTC-USD Approaches $94,000 Amid Mixed On-Chain Signals

Bitcoin ETFs have experienced a strong inflow in early 2026, driven largely by BlackRock’s iShares Bitcoin Trust (IBIT). The fund recorded $287.4 million in net inflows on a single day, marking its largest since early October 2025. This momentum was mirrored across other ETFs, with Fidelity’s FBTC and Bitwise’s BITB also seeing significant capital inflows according to TradingNews.

XRP and Ether ETFs followed a similar trend, with XRP ETFs absorbing around $43 million in net weekly inflows and Ether ETFs adding $161 million. These inflows suggest growing institutional confidence in digital assets, with ETFs acting as the primary vehicle for portfolio diversification according to TradingNews.

The U.S. Department of Justice (DOJ) issued subpoenas to Federal Reserve Chair Jerome Powell in a move that has raised concerns about the independence of the central bank. The subpoenas relate to Powell’s testimony on a renovation project at the Fed’s offices and are seen as part of a broader political pressure campaign led by President Trump. The Fed has previously stated that it will continue to hold interest rates steady despite the political scrutiny according to Channel News Asia.

The U.S. Justice Department has also taken action in the fraud investigation in Minnesota, sending a team of federal prosecutors to the state to examine allegations of widespread fraud in social services programs. Attorney General Pam Bondi emphasized the need to hold perpetrators accountable and signaled potential expansion of this effort to other states according to CBS News.

Why Did This Happen?

The ETF inflows were bolstered by macroeconomic and geopolitical factors, including the U.S. military operation in Venezuela, which saw the administration capture President Nicolás Maduro. The operation, supported by a legal memo from the DOJ, reinforced Bitcoin’s role as a geopolitical hedge. Investors interpreted the geopolitical tension as a reason to allocate more capital into Bitcoin as a macro hedge against instability according to TradingNews.

Meanwhile, the January calendar effect played a role, with institutional rebalancing and tax-loss harvesting in Q4 leading to a fresh window of capital inflows. ETFs offer a clean, tax-efficient way for investors to reallocate exposure without triggering additional compliance hurdles according to TradingNews.

How Did Markets Respond?

Bitcoin’s price responded positively to the ETF inflows, with BTC-USD rising toward the $94,000 range. However, the rally was tempered by on-chain signals of caution. Long-term holders have been selling into strength, indicating a late-cycle profile where external demand propped up the price while organic conviction waned according to TradingNews.

Institutional demand for BTC-USD has weakened slightly this week, with ETFs recording outflows as of January 8. On-chain data from Santiment showed spikes in realized profit-taking, suggesting increased selling pressure from traders who had accumulated gains according to FXStreet.

What Are Analysts Watching Next?

Analysts are closely watching the performance of Bitcoin ETFs and their ability to sustain institutional inflows. The ETF structure provides a critical on-ramp for traditional investors, especially in a market where custody and compliance remain challenges for direct digital asset ownership according to TradingNews.

On the regulatory front, the DOJ’s actions against the Federal Reserve and its broader investigations into crypto fraud could impact market sentiment. Investors are assessing the potential for regulatory overreach to affect market stability and central bank independence according to Channel News Asia.

India’s regulatory developments also remain under scrutiny. In 2025, India registered 49 crypto exchanges and issued $3.1 million in fines for AML violations. These changes have brought clarity for users and increased institutional participation, but challenges remain with regard to the Reserve Bank of India’s skepticism toward private cryptocurrencies according to Yahoo Finance.

Grayscale Investments has filed for options trading approval on its CoinDesk Crypto 5 ETF (GDLC), which tracks Bitcoin, Ethereum, XRP, Solana, and Cardano. If approved, it would expand the flexibility of investors to hedge or speculate on price movements, potentially drawing more capital into the crypto space according to The Coin Republic.

Bitcoin’s price has faced mixed signals in recent days, slipping below $90,000 as institutional demand waned and ETF outflows persisted. The RSI on the daily chart has fallen below the 50 level, signaling weakening bullish momentum. Analysts are watching whether BTC can find support near the $90,000 level and retest key resistance zones according to FXStreet.