Bitcoin price is exploding, and a rare “gamma squeeze” suggests the price action is about to get violent
Bitcoin’s temporary climb above $97,000 over the previous day prolonged a run that suggests the underlying mechanics sign a structural shift in how capital is interacting with the asset class.
According to CryptoSlate knowledge, BTC reached a peak of $97,860, its highest price degree since final November. This price efficiency continues the flagship digital asset’s strong start to the year, which has pulled the broader crypto market alongside.
However, the upward price motion was not occurring in a speculative vacuum. Instead, it is supported by key on-chain metrics that paint a image of renewed institutional urge for food clashing with a provide aspect that has abruptly stopped promoting.
Here, CryptoSlate, citing on-chain knowledge, explains why Bitcoin is presently in an uptrend.
Bitcoin’s spot bid and whale dominance
The most direct driver behind the price appreciation was a sharp re-acceleration in US spot Bitcoin ETF inflows.
Data from Coinperps confirmed that the 12 Bitcoin ETF merchandise have seen inflows of greater than $1.5 billion in the final two days alone.
Those should not simply large numbers as a result of they matter mechanically.
Post-halving, Bitcoin’s new issuance is roughly 450 BTC per day. At present costs, this represents a comparatively small greenback determine in contrast with the sort of demand implied by high-inflow ETF days.
ETF flows should not the solely supply of spot shopping for, and they don’t map 1:1 to instant “market buys” in each case. Yet, they’re a extremely seen, regulated conduit that may rapidly pull incremental demand into the market.
This is significantly efficient when institutional allocators rebalance or when broader “risk-on” flows return to monetary markets.
This dynamic explains why ETF circulate knowledge has change into a day by day macro-like sign for the crypto sector. It helps clarify why Bitcoin can rise even when crypto-native narratives are quiet.
Data from CryptoQuant reinforces this narrative of spot-led power. According to the agency’s indicators, the transfer was not initially pushed by leverage however by real demand for the underlying asset.
CryptoQuant’s 90-day Spot Taker CVD started turning constructive round $86,000, signaling elevated Taker Buy dominance. This metric signifies that market purchase quantity persistently outweighed promote quantity properly earlier than the price reached its present highs.
Furthermore, the high quality of this shopping for was distinct. Spot Average Order Size flashed “Whale Orders” throughout the identical interval. This signifies the purchase quantity was pushed by bigger entities reasonably than dispersed retail hypothesis.
These buyers stepped in to take the lead on this rally by way of spot purchases reasonably than counting on fragile leverage.
Profit-taking slows
The second leg of the transfer is outlined by the absence of a detrimental drive: relentless profit-taking.
Glassnode’s current market notes present realized revenue falling sharply from the elevated ranges seen earlier in the fourth quarter.
According to the agency, BTC’s 7-day transferring common of realized profit for long-term holders dropped to roughly $183.8 million per day. This is down considerably from ranges above $1 billion per day in late 2025.
That issues as a result of Bitcoin rallies don’t solely require patrons. They additionally require fewer keen sellers.
When profit-taking depth fades, even reasonable demand can push the price larger as a result of the market is not always being “refilled” with distribution from holders locking in beneficial properties.
Notably, this reluctance to promote is additional evidenced by the Value Days Destroyed (VDD) indicator. This metric calculates the variety of days bitcoins remained inactive earlier than being moved, weighted by the quantity of BTC transferred.
A low worth signifies that youthful cash are being moved, whereas a high worth signifies that older, long-held cash are being spent.
Currently, the VDD stands at roughly 0.53 as of January 2026, a traditionally low degree. This suggests that the BTC being transferred on the community is comparatively younger, implying that older cash stay untouched.
Past cycles counsel that a rising Bitcoin price paired with a muted VDD studying indicators a strong growth. In this surroundings, incoming demand doesn’t want to chew by way of a wall of structural promoting, permitting bids to elevate costs extra effectively.
Therefore, the present breakout above resistance is supported by the inactivity of long-term holders. This reinforces the concept that actual market power is driving the asset reasonably than a fragile rebound fueled by short-term hypothesis.
Derivatives as an accelerant
The third driver is a traditional accelerant: derivatives positioning.
As Bitcoin pushed upward, crypto market coverage tracked a wave of short liquidations. These are compelled buybacks by merchants betting towards the transfer. These occasions can create abrupt “air pockets” as stops are hit and liquidations cascade.
Indeed, knowledge from Glassnode confirmed that the newest transfer triggered the largest quick liquidation event since Oct. 10 throughout the high 500 cryptocurrencies.
However, past the headline liquidation tally, the extra structural shift might have been what occurred to choices.
Glassnode additionally famous that the market noticed its largest-ever choices open curiosity reset round the late-December expiry, with open curiosity dropping from 579,258 BTC to 316,472 BTC. This represents a discount of greater than 45%.
For market observers, choices open curiosity is crucial as a result of it could change how market makers hedge danger.
Glassnode additionally flagged that vendor gamma was quick in the ~$95,000–$104,000 zone. This setup can amplify upside as soon as price begins rising, as hedging flows align with the transfer reasonably than dampen it.
Put merely, the rally not solely attracted new patrons. It additionally compelled shopping for (by way of liquidations and hedging habits) as soon as key ranges have been challenged.
Meanwhile, CryptoQuant knowledge confirms that futures participation arrived later in the sequence and was dominated by retail exercise.
According to the agency, BTC’s Futures Taker Buy Volume turned constructive round $91,400, which was a bit later than the spot bid.
Still, it aligned with the high crypto’s upward development and confirmed the market’s power.
Macro and coverage tailwinds
Bitcoin doesn’t commerce in a vacuum, and macro inputs supplied a friendlier backdrop this week.
The latest US CPI release confirmed headline inflation at 2.7% year-over-year in December, with core CPI at 2.6% year-over-year. On a month-to-month foundation, headline CPI was 0.3% (seasonally adjusted).
Markets typically translate this into a easy query: Does inflation stress hold actual yields elevated and monetary situations tight, or does it permit danger urge for food to increase?
Real yields stay traditionally significant (round 1.83% on the US 10-year TIPS yield in current readings), however a softer inflation impulse can scale back the odds of additional tightening shocks and assist high-beta belongings.
Bitcoin’s sensitivity to macro varies by regime. However, in durations the place crypto trades as a “risk-on” proxy, much less inflation anxiousness will be sufficient to assist a rebound, particularly when spot flows and positioning align.
Meanwhile, a quieter contributor is the evolving US coverage dialog round crypto market construction.
US lawmakers frame the CLARITY Act as an necessary piece of laws that creates clearer boundaries between companies and reduces “regulation-by-enforcement” dynamics.
While the laws has drawn completely different reactions from market stakeholders, trade gamers agree that the invoice could possibly be constructive for BTC by creating a friendlier regime that compresses the danger premium.
Can Bitcoin proceed the run?
The query now is whether or not Bitcoin can convert this rebound into sustained upward momentum.
Glassnode highlights the Short-Term Holder (STH) value foundation round ~$99,100 as a key threshold. The logic is easy. When current patrons are at breakeven or revenue, they’re much less probably to promote defensively on small pullbacks, and momentum merchants acquire confidence.
At the identical time, Bitcoin is coming into an overhead provide zone the place many patrons’ value bases cluster. Glassnode flags a broad overhead vary of roughly $92,100 to $117,400.
This implies that as price strikes larger, it could repeatedly encounter cohorts keen to promote into power close to breakeven.
That creates two believable paths. In a continuation situation, if ETF inflows stay persistently constructive and the price reclaims ~$99,000, the market can grind larger by way of provide as sellers are absorbed (particularly if derivatives hedging stays supportive).
In a failure situation, if price repeatedly rejects under the STH value foundation and macro turns tighter by way of larger actual yields, the transfer dangers trying like one other vary rally that exhausts as overhead provide reappears.
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