Bitcoin has entered the new year with renewed vigor, shaking off a volatile end to 2025. The leading cryptocurrency is showing signs of recovery, buoyed by fresh capital flowing into exchange-traded funds and a more favorable liquidity landscape. The critical question for the market is whether this solid start can evolve into a sustained upward trajectory.

A Constructive Technical Setup

Currently trading near $92,600, Bitcoin’s price sits modestly below Monday’s levels but remains comfortably above the lows seen at the year’s end. The digital asset has posted a gain of approximately 6% over the past seven days and is up around 4% year-to-date.

From a chart perspective, the setup appears constructive. The price is holding just above the 50-day moving average, suggesting a gradual stabilization following December’s consolidation phase. However, Bitcoin remains roughly 26% below its 52-week high, indicating significant distance from record territory. A Relative Strength Index (RSI) reading near 38 points to a market that is cooled rather than overheated.

The Driving Force: ETF Demand and Wall Street

The primary catalyst for the recent strength is unmistakably institutional. U.S. spot Bitcoin ETFs recorded net inflows of $697 million on January 5th—the largest single-day figure since October 2025.

Two funds were particularly notable contributors:
* BlackRock’s IBIT ETF attracted over $372 million.
* Fidelity’s FBTC product saw inflows of an additional $191 million.

This brings the total net inflows for just the first two trading days of 2026 to more than $1.16 billion. This surge signals that traditional financial investors are re-engaging with Bitcoin following the weakness at the close of the previous year.

Should investors sell immediately? Or is it worth buying Bitcoin?

Further underscoring this institutional trend, Morgan Stanley has filed for new spot ETF products for both Bitcoin and Solana with the U.S. Securities and Exchange Commission (SEC). This move demonstrates that major Wall Street firms are intent on expanding their footprint in the crypto sector, despite the ongoing regulatory uncertainties.

Underlying Network Health: A Mature Foundation

On-chain data presents a nuanced but overall maturing picture for the Bitcoin network.

• Mining Dynamics: The total network hash rate has declined for the second consecutive month. Interestingly, mining equities have shown notable strength. For instance, Hut 8 (HUT) has rallied to a four-year high, driven by a dual narrative: the increased value of its Bitcoin treasury and its expansion into capacity for AI data centers.
• Transaction Activity: Network activity is hovering near its three-month high. This suggests the current price appreciation is supported by genuine usage and value transfer, not merely speculative derivative trading.
• Macro Liquidity Support: The U.S. Federal Reserve recently injected $74.6 billion into the market via repo operations. This additional liquidity has eased funding conditions, creating a tailwind for riskier assets like cryptocurrencies.

Collectively, these factors point to a market increasingly underpinned by structural demand and network utility, rather than short-term speculation alone.

Market Sentiment and Key Levels to Watch

The prevailing mood has brightened considerably, shifting from “extreme fear” at the end of 2025 to “cautious optimism.” The failure of bearish forces to push Bitcoin below the key support zone around $87,000 at the start of the year has emboldened buyers.

On the upside, the $98,000 zone is now coming into focus for many analysts. A convincing breakout above this level is widely viewed as a prerequisite for a serious attempt at the psychologically significant $100,000 mark. As long as ETF inflows remain robust and liquidity conditions stay supportive, the broader environment in Q1 2026 favors a continuation of the recovery rather than an abrupt reversal.

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