On-Chain Signal Shows Bitcoin's Rise Toward $98K Is Structured and Supported

Bitcoin’s price has climbed above $97,000, marking a significant milestone after a multi-month consolidation phase. The move coincides with strong on-chain signals of institutional accumulation and corporate buying.

Large Bitcoin holders—often referred to as whales—are continuing to buy the dip, a trend that has historically preceded larger market gains. Whale accumulation has outpaced retail selling, suggesting confidence in Bitcoin’s long-term value.

The recent rally has also been supported by surging inflows into U.S. spot Bitcoin ETFs. On January 5 alone, these funds saw over $697 million in net inflows, with BlackRock's IBIT and Fidelity's ETFs leading the charge.

Why Is This Price Move Structured and Not Random?

Bitcoin’s rise to $97,000 is supported by clear on-chain activity. Whale accumulation has been steady, contrasting with retail hesitation and distribution. This divergence is often a precursor to sustained bullish trends in the cryptocurrency market.

Institutional buying is a key driver. Public companies like MicroStrategy have continued to purchase large amounts of Bitcoin as part of their corporate treasury strategies. In early January, MicroStrategy spent $1.25 billion to acquire 13,627 Bitcoin, bringing its total holdings to over 687,000 BTC.

How Do Markets React to Institutional Accumulation?

The market has responded favorably to corporate and institutional buying. Bitcoin's price has moved in close correlation with net institutional demand over the past year. This aligns with a broader trend of institutional investors using Bitcoin as a hedge against inflation and a long-term store of value.

Spot Bitcoin ETFs have also seen a reversal in outflows, with inflows surpassing $1.7 billion in a three-day period. This shift has helped absorb sell pressure and stabilize the price during volatile sessions.

What Are Analysts Watching for Confirmation or Divergence?

Analysts are closely monitoring the number of Bitcoin holders and exchange supply. The number of active wallets has declined, a sign that retail investors are stepping back. Meanwhile, the supply of Bitcoin on exchanges has fallen to a seven-month low, reducing the risk of a large-scale selloff.

On-chain data also shows a negative Coinbase Premium Index for Ethereum, signaling elevated selling pressure from U.S. institutional investors. This could indicate broader caution among professional investors, even as Bitcoin shows strength.

Retail investors are being advised to remain cautious. While whale accumulation and ETF inflows suggest strength, favorable probabilities do not guarantee positive outcomes. Markets can shift quickly, and whale behavior can change depending on macroeconomic conditions.

The recent regulatory developments are also shaping investor sentiment. The proposed Digital Asset Market CLARITY Act could provide a more defined regulatory framework, encouraging further institutional participation.

For now, Bitcoin’s market structure appears supportive. The challenge for investors will be determining how long the current divergence between whale accumulation and retail distribution persists. Until then, the path of least resistance for Bitcoin appears to be higher, though caution remains warranted in a market that can reverse quickly.

The next few weeks will be crucial in confirming whether this rally is the start of a larger trend or a temporary consolidation before a potential pullback.