Bitcoin (BTC) topped $94,000 on January 5, reaching its highest level since December 10, capping a rally that added nearly $100 billion to the crypto market's market capitalization in 24 hours.
The move comes as spot Bitcoin ETFs recorded their biggest inflows in three months, derivatives positioning turned aggressively bullish, and the macro environment created room for risk assets to rebound heading into the new year.
The US Spot Bitcoin ETF recorded $471 million in net inflows on January 2, led by BlackRock’s IBIT, pushing BTC back over $90,000 over the weekend and setting the stage for today’s breakout.
The demand for ETFs comes as institutional flows return following year-end consolidation, with January following the heavy outflows that characterized the second half of 2025.
The combination of new institutional investor appetite and thin liquidity post-holiday allowed inflows to push prices up more decisively than in normal trading conditions.
Derivatives markets amplified the rally through a familiar feedback loop.
Deribit open interest soared as options traders flocked to upside calls around the $100,000 strike price, with total options open interest in January reaching about $1.45 billion.
According to CoinGlass data, more than $438 million in short positions were liquidated in the past 24 hours, forcing additional purchases as Bitcoin broke through resistance.
Short squeeze dynamics accelerated the move from the low $90,000s to the $94,000s, with the thin order book exaggerating each leg higher.
Additionally, the macro background provided support from multiple angles.
The market has digested the weaker-than-expected US manufacturing data, increasing expectations that the US Federal Reserve will be able to maintain its monetary easing policy.
Macro tailwinds and bullish options outlook
At the same time, geopolitical risks spiked as the US launched an operation targeting Venezuelan President Nicolas Maduro, prompting repositioning across asset classes.
Tech stocks rose alongside traditional safe-haven assets such as gold and silver, with Bitcoin gaining bid as investors shifted to both growth and defensive positioning in early 2026.
The broader cryptocurrency market reflected Bitcoin's strength, with its market capitalization increasing 3.1% to nearly $3.3 trillion.
Ethereum rose 3.1% in the past 24 hours to trade at $3,244, while XRP rose 11.5% to $2.33, posting the biggest increase among the major assets. Solana rose 3.7% to $189, Cardano rose 5.2% to $0.8218, and Dogecoin rose 2.6% to $0.1534. BNB rose 2.2% to $915.
A combination of ETF inflows, whale accumulation, and forced covering of short positions triggered the breakout and allowed for upward momentum to build with relatively light resistance between $90,000 and $94,000.
Option positions reflect the bullish outlook, with call buyers betting on further gains through January expiration. Bitcoin has not closed above $94,000 since mid-December. This time there was a brief spike to similar levels before a month-long maintenance phase.
This technical situation indicates that Bitcoin has regained the levels it last held about four weeks ago, breaking out of the $90,000 to $92,000 range that had limited any upside attempts until late 2025.
Whether Bitcoin can break above $94,000 and challenge $100,000 will depend on whether ETF demand continues at the pace seen on January 2nd and whether macro conditions remain constructive.
The weak manufacturing data confirms the Fed's dovish stance, but geopolitical developments create uncertainty that could sway sentiment either way.
So far, a combination of institutional inflows, derivatives positioning, and thin liquidity have pushed Bitcoin back to levels last seen in mid-December.
