Bitcoin Prices Surge: Are BTC ETF Inflows Setting Up for a $100K Rally?

Bitcoin (BTC) has started this week with a positive trend, surpassing the $90,000 threshold for the first time since December 12, and maintaining this level for four straight days. This extended movement indicates growing demand and enhanced price stability at higher price points.

Key Takeaways

Bitcoin's price has risen above $90,000 for four consecutive days, indicating increasing market demand.
The Short-Term Holder Net Unrealized Profit/Loss (STH NUPL) is near breakeven, highlighting diminishing losses among short-term investors.
Institutional and retail investors are showing renewed interest, evidenced by significant inflows into Bitcoin ETFs and increases in Bitcoin buying.
Global liquidity conditions are improving, suggesting a supportive macroeconomic environment for Bitcoin and other assets.

Bitcoin prices rise: Are BTC ETF inflows setting up a $100K move?

Market dynamics are increasingly favoring bullish sentiments, particularly as Bitcoin gradually reduces the losses incurred by short-term holders. This development reflects a positive shift in sentiment and an ongoing recovery within short-term investing positions.

Short-Term Holder Losses Continue to Narrow

The Short-Term Holder Net Unrealized Profit/Loss (STH NUPL), a key indicator measuring the profits or losses of short-term investors holding Bitcoin, continues to decrease. This trend shows that the losses for short-term holders are lessening as the price moves upward.

Currently, Bitcoin’s STH NUPL is nearing the zero mark. This indicates that many short-term holders are approaching breakeven, with Bitcoin trading around $93,450 at the time of writing. Alphractal reports that the zero level corresponds to a Bitcoin price of approximately $99,000, which represents a crucial breakeven threshold for short-term holders. Nonetheless, a strong confirmation of a bullish trend requires the price to decisively surpass this level and maintain momentum as it approaches the $100,000 mark.

Bitcoin STH NUPL

Alphractal emphasizes, “Historically, the area around 0 acts as resistance for this metric. A transition into positive territory only happens if BTC breaks above and holds the Short-Term Holder Realized Price.” With Bitcoin sitting about $5,500 away from this critical level, traders are closely monitoring whether bullish sentiment will be strong enough to push prices beyond it.

Investors Return to Accumulation

Buying activity has surged among two significant groups of investors: institutional clients and individual retail investors.

Institutional investors kicked off the week robustly, seeing U.S. spot Bitcoin ETFs record a total net inflow of $452.4 million over the first two trading days of January. Notably, $697.25 million in Bitcoin was added to institutional portfolios on the first day alone, following a series of sell-offs totaling $1.11 billion. This marks a clear shift back to a sentiment of accumulation.

Similar patterns are evident in the spot market. After four consecutive days of selling from January 2 to January 5, during which $373.5 million worth of Bitcoin was withdrawn, buyers have returned with renewed enthusiasm.

bitcoin spot exchange netflow.

According to Spot Exchange Netflow data, which tracks Bitcoin movements in and out of exchanges, $481.76 million worth of BTC has been withdrawn into private wallets. This behavior is typically associated with long-term holding strategies and signals a positive outlook, reducing the supply available on centralized exchanges. Overall, consistent buying pressure from both individual and institutional investors is essential for supporting potential price increases and further strengthening Bitcoin’s upward trajectory.

Global Liquidity Adds Macro Support

In addition to on-chain trends and investor behavior, the broader macro liquidity conditions are aligning positively. The M2 Money Supply Global has been increasing, enhancing liquidity for risk assets, including Bitcoin.

M2 represents the amount of money that is easily accessible for spending or investment. Historically, rising M2 levels are beneficial for assets such as Bitcoin, suggesting increased liquidity and potential influx of capital.

M2 Money supply

However, the effects of increased liquidity are not immediate and may take several months to impact asset prices. While the benefits of rising M2 haven't yet fully taken effect, the general trend remains positive.

If current market trends continue, Bitcoin could further reduce the gap between its current price and the STH NUPL breakeven area close to $99,000. The combination of improving short-term holder conditions, renewed institutional investments, increasing spot demand, and growing global liquidity creates a stronger case for potential price increases in the near to medium term.

Final Thoughts

As Bitcoin continues to rise, the interplay of investor sentiment, macroeconomic factors, and technical indicators will be critical in determining whether it can reach the $100,000 milestone. Monitoring these developments closely will be essential for traders and investors moving forward.