What’s Driving the Surge in Bitcoin’s Price Today? Short Squeeze, ETF Inflows, and More

Bitcoin has continued its rally, propelled by softer inflation data, reaching approximately $98,000 during trading on January 14th. It closed the day at $97,900, marking a 10% increase for its 2026 surge, though it slightly retraced to $96,500 at the time of this writing.

Key Takeaways

Bitcoin's price surged, reaching nearly $98,000, driven by positive inflation data.
The cryptocurrency surpassed the $95,000 resistance, a significant milestone since November.
Short positions faced liquidation, contributing to the recent price rally.
Improved market sentiment transitioned to a “greed” level, indicating renewed investor confidence.
A reclaim of the 50-week EMA is critical for maintaining a bullish trend, with risks of a dip if it stalls below this level.

What’s Driving the Surge in Bitcoin's Price Today? Short Squeeze, ETF Inflows, and More

Bitcoin Upward Movement Source: BTC/USDT, TradingView

The cryptocurrency managed to surpass the $95,000 resistance that had kept it stagnant since November. However, for a sustained bullish trend, reclaiming the 50-week Exponential Moving Average (50-Week EMA) is essential. Historically, this EMA has acted as support during significant corrections in bullish rallies. Falling below it suggests a potential shift to a bearish phase. This level was breached when Bitcoin dropped below $100,000 in November, but the recovery in 2026 could turn it back into a support level, provided there is a successful weekly close above $97,600. This leads to important inquiries: what fueled this recent move, and can the critical support be regained?

Short Liquidations Propel Bitcoin Higher

Earlier this week, sellers were pushed out of the market. In just two days, short liquidations peaked at a two-month high of $125 million on January 14th, with $58 million worth of short positions liquidated, indicating that the mid-week rally was also influenced by a liquidity grab.

Short Liquidations Source: Glassnode

Market sentiment also shifted positively, climbing to a “greed” level for the first time since October. For comparison, the Crypto Fear and Greed Index was in the “fear” category at the beginning of the week. However, after the U.S. inflation report, Bitcoin broke above $95,000, and sentiment transitioned to “neutral” by mid-week.

Is Investor Risk Appetite Returning?

As of this writing, the sentiment has risen further to the “greed” level, indicating that investor risk appetite is back. In the past three days, U.S. Spot ETFs saw over $1.7 billion in total net inflows, showcasing a risk-on mentality among investors. The overall price momentum has also turned positive, with some anticipating Bitcoin could hit $98,000 or even $100,000 by the end of January. However, a definitive reclaim of the 50-week EMA support remains a crucial indicator for a renewed bullish momentum.

Bitcoin Price Momentum Source: Checkonchain/X

Moreover, since there remain leveraged short positions clustered around $99,000, another liquidity grab might push Bitcoin prices even higher. Conversely, stalling below the 50-week EMA ($97,650) could open the door for a potential price slump.

Price Chart Analysis Source: CoinAnk

Conclusion

Bitcoin’s present rise can be attributed to a combination of factors including short liquidations and renewed investor interest following significant ETF inflows. The ongoing recovery will depend on whether key support levels can be reclaimed, highlighting the importance of monitoring market dynamics closely in the coming weeks.