Bitcoin's Struggle to Break $90K: Is Institutional Buying Enough to Sustain a 2026 Rally?

Bitcoin's price action in late 2025 and early 2026 has been a tug-of-war between institutional demand and on-chain capital outflows. As the cryptocurrency hovered near the $90,000 psychological level in January 2026, the question looms: Can institutional buying sustain a rally in 2026, or will persistent on-chain outflows drag the price lower?

Institutional Demand: A Mixed Picture

Institutional flows into Bitcoin ETFs were once a tailwind for the asset. In 2025, combined inflows into Bitcoin and Ethereum ETFs reached $31 billion, driven by regulatory clarity and the approval of spot ETFs in major markets like the U.S. and EU. However, this momentum reversed sharply in Q4 2025. By December, ETF outflows accelerated, with $5.5 billion leaving the sector, led by the iShares Bitcoin Trust (IBIT). Despite this, corporate entities continued to accumulate Bitcoin, with holdings rising to $93.4 billion, fueled by companies like Bitmine Immersion Technologies.

The Grayscale 2026 outlook remains cautiously optimistic, citing macroeconomic demand for alternative stores of value and maturing regulatory frameworks as tailwinds. Yet, the reality in Q4 2025 was more nuanced. While institutions bought during October's 14% price correction, ETF inflows slowed in late 2025, with daily outflows ranging between –$150M and –$700M. This suggests a shift toward capital preservation amid macroeconomic uncertainty.

On-Chain Outflows: A Growing Headwind

On-chain activity in Q4 2025 tells a different story. US-based Bitcoin ETFs saw net outflows exceed $3.3 billion, signaling a broader bear market characterized by deteriorating demand and weakened market structure. On-chain settlement volumes, however, remained robust, with $6.9 trillion in value settled over 90 days-on-par with traditional payment networks like Visa. This dichotomy reflects a migration of trading activity to regulated venues (ETFs and brokers), while Bitcoin's foundational network activity persisted.

Address-level data reveals further tension. Active addresses on the Bitcoin network declined from ~240,000 to 170,000 per day, while exchange withdrawals surged, indicating risk-off behavior. Short-term holders grew in influence, with their supply ratio hitting 18.4%, exceeding the upper statistical band of 16.9%. This imbalance suggests heightened market sensitivity to capital flows and potential for sharper price swings.

The Interplay: ETFs vs. On-Chain Dynamics

The price action near $90K in early 2026 highlights the clash between these forces. In January 2026, ETF inflows briefly supported Bitcoin above $90K, driven by start-of-year portfolio rebalancing and macro hedging. However, this optimism was short-lived. By January 6–7, ETF outflows reached $729 million, pushing the price down to $90K. On-chain data from Glassnode showed daily realized profits plummeting to $183 million from over $1 billion in Q4 2025, underscoring reduced selling pressure but also a lack of sustained bullish momentum.

Technical indicators suggest Bitcoin is in a consolidation phase. A break above $94,700 could target $100K–$102K, but a loss of $90K support risks a decline toward $85K. This volatility reflects the market's reliance on ETF flows as the primary price driver- a shift from traditional on-chain metrics.

Can Institutional Buying Sustain a 2026 Rally?

The answer hinges on two factors: 1) the ability of institutions to re-engage, and 2) the resolution of macroeconomic headwinds. While ETF outflows in Q4 2025 were bearish, institutional demand via corporate accumulation and strategic allocations remains intact. The Grayscale 2026 outlook and Bitwise's long-term price forecasts (up to $1.3 million by 2035) signal enduring institutional conviction.

However, on-chain outflows and reduced network activity indicate a market in hibernation. For a 2026 rally to materialize, ETF inflows must reaccelerate, and stablecoin liquidity-averaging $225 billion in transfers daily-must support broader bullish trends. Crucially, macroeconomic signals like U.S. payrolls and interest rate adjustments will dictate institutional risk appetite.

Conclusion

Bitcoin's struggle to break $90K is emblematic of a market at a crossroads. Institutional demand, while resilient, faces headwinds from on-chain outflows and macroeconomic uncertainty. The coming months will test whether the asset's institutional adoption can overcome these challenges-or if the bearish momentum of Q4 2025 will linger into 2026. For now, the price near $90K remains a battleground, with ETF flows and on-chain dynamics locked in a delicate balance.