Shortest Bear Market Ever? Key Metrics Suggest Bitcoin Price Could Surpass $125,000 Before April

Bitcoin and Ethereum spot ETFs have seen a sharp reversal in investor flows in early January 2026. After a brief surge in inflows at the start of the year, these funds have recorded substantial outflows in the following days. This shift reflects growing caution among investors.

The initial inflows on January 2 and January 5 totaled over $1.17 billion in Bitcoin ETFs. However, by January 8, more than $1.128 billion had flowed out. A similar pattern emerged in Ethereum ETFs. This reversal has erased early gains and raised concerns about the sustainability of investor interest.

Bitcoin's open interest has also fallen sharply, reaching levels not seen since 2022. This suggests a broader deleveraging in the market as traders close positions. The decline in open interest coincides with a drop in Bitcoin's price, which has fallen to around $90,150.

Why Did This Happen?

The initial inflows were driven by a new-year "clean-slate effect," where investors began 2026 with a renewed appetite for risk. However, this optimism did not last. The outflows that followed reflect a reevaluation of exposure after a period of volatility in late 2025.

Investor sentiment had already weakened in the final months of 2025, with Bitcoin ETFs seeing outflows of $3.48 billion in November and $1.09 billion in December. The market correction in October 2025, which saw a $20 billion liquidation event, further contributed to a cautious tone.

How Did Markets Respond?

Bitcoin's price has followed a similar trajectory to ETF flows. The cryptocurrency traded above $94,600 at the start of January but dropped to $90,360 by the end of the week. Analysts suggest this reflects a broader risk-off sentiment across financial markets.

Ethereum also saw a decline in ETF inflows, with $159 million in outflows recorded on January 8. Solana and XRP ETFs, however, have maintained more consistent inflows, with Solana ETFs recording eight consecutive days of positive flows.

What Are Analysts Watching Next?

Market analysts are closely monitoring several key indicators. These include Bitcoin's open interest levels, which have now dropped to their lowest since 2022. This is seen as a sign that the market is in a cleanup phase, where weaker leveraged positions are being removed.

Investor flows into ETFs will also be critical. While the initial inflows in January were large, the subsequent outflows have erased most of that activity. Analysts are watching for signs that institutional investors will return to the market with renewed conviction.

Bitcoin's price performance will also be watched closely. Some analysts suggest the cryptocurrency could see a rebound if macroeconomic conditions improve. Others, however, believe we may be entering a slow bear phase similar to the one seen in 2019. In this scenario, Bitcoin may trend lower or sideways into mid-2026.