As 2026 takes shape, the cryptocurrency market witnessed a resurgence in positive momentum, with Bitcoin reaching past $97,000 after a rather sluggish performance throughout 2025.

Strong Spot ETF Demand Lifts Bitcoin Prices At the Start of 2026

This recovery has been driven by several fundamental factors, most notably the performance of Bitcoin spot ETFs. These funds attracted massive cash inflows estimated at $760 million in a single day, the largest volume since last October. Fidelity’s FBTC fund alone accounted for $351 million of these inflows, demonstrating renewed interest in digital assets from both institutional and retail investors.

This momentum did not come out of nowhere but was largely driven by positive inflation data coming out of the United States this week, where December’s CPI reading came at 2.7%, with core CPI remaining at 2.6% These readings were below market expectations, lowering market inflationary fears and reigniting hopes for lowering interest rates even further this year. 

The combination of these factors: surging ETF inflows, stabilizing inflation, and expectations of monetary easing, forms the backdrop for Bitcoin’s recovery. It reflects a maturing relationship between traditional financial markets and the digital asset space in 2026.

Technical outlook for Bitcoin January 2026

For the first time since November 17, 2025, Bitcoin has risen above the $94,820 level, marking a higher high on both the daily and 4-hour timeframes. This indicates a structural trend shift from bearish to bullish over the medium to long term.

Figure 1: BTC/USD, 4H, TradingViewFigure 1: BTC/USD, 4H, TradingView

Currently, the price is trading in an overall uptrend, characterized by consecutive higher highs. A corrective pullback to the $95,000 level could reignite short-term bullish momentum, targeting the $97,000 mark.

Key Technical Levels and Downside Risk for Bitcoin

However, should the price drop below $94,515 and close a 4-hour candle beneath it, this would signal a trend reversal on the 4-hour timeframe. In such a scenario, we might see a deeper retracement toward the $84,246 level before the price regains its footing to resume the long-term bullish trend on the daily chart.