BTC Breaks Higher as Record Bitcoin ETF Inflows Trigger Wave of Bearish Liquidations

[Ben Graham]

Bitcoin (BTC) surged sharply this week, surpassing the $96,000 mark as renewed institutional demand and easing inflation concerns boosted sentiment across crypto markets.

The action followed a strong inflow into U.S. spot Bitcoin exchange-traded funds (ETFs) and a softer-than-feared U.S. Consumer Price Index (CPI) report, which reduced expectations of aggressive interest rate tightening by the Federal Reserve.

The rally ended a prolonged consolidation phase that had kept Bitcoin trading sideways for more than a month. As prices broke through key resistance levels near $94,000–$95,000, short sellers were forced to close positions, adding further momentum to the upside.

Bitcoin ETF Inflows Signal Institutional Return

U.S. spot Bitcoin ETFs recorded $753.7 million in net inflows on Tuesday, the largest single-day total since October. Fidelity’s FBTC led with $351 million, followed by Bitwise’s BITB with $159 million and BlackRock’s IBIT with $126 million, according to data from SoSoValue.

The surge suggests institutional investors are rotating back into crypto-linked products after year-end portfolio adjustments and tax-related selling weighed on the market in late 2025. Ether-focused ETFs also saw renewed interest, with $130 million in net inflows across five products.

Bitcoin rose around 3% following the data, trading near $94,600 at the time, while Ethereum gained more than 6% to around $3,320. Broader crypto markets followed, lifting total market capitalization above $3.3 trillion.

Inflation Data Supports Risk Assets

The latest U.S. CPI report showed inflation holding steady at 2.7% year-on-year, largely in line with expectations. The absence of an inflation surprise reduced fears of further rate hikes and reinforced views that the Federal Reserve could pivot toward rate cuts later in the year.

Lower real-rate expectations typically support risk assets, including cryptocurrencies, by reducing the opportunity cost of holding non-yielding assets, such as Bitcoin. U.S. equities also advanced, suggesting the crypto rally was part of a broader shift in risk sentiment rather than an isolated move.

Short Liquidations Add Fuel to the Rally

As Bitcoin surged past $96,000, bearish positions were wiped out. Data from Coinglass shows more than $290 million in Bitcoin short positions were liquidated within 24 hours, compared with about $24 million in long liquidations. Across the broader cryptocurrency market, short liquidations totaled close to $700 million.

Strong spot buying, rising open interest, and technical breakouts contributed to the move. Bitcoin is now testing former resistance levels as support, with chart patterns indicating a possible continuation toward the $105,000–$110,000 range if momentum persists.

While short-term consolidation remains possible near the $98,000–$100,000 zone, sustained ETF inflows, reduced selling pressure from long-term holders, and continued corporate accumulation suggest underlying demand remains firm.

Cover image from ChatGPT, BTCUSD chart from Tradingview