Bitcoin prices were trading around $97,000 on Wednesday after posting a sharp rally in the previous session, supported by improving risk appetite, strong institutional inflows, and a constructive technical setup.
The world’s largest cryptocurrency rose more than 4.5% on Tuesday, closing above a key resistance zone as investors responded positively to softer-than-expected US inflation data.
The move helped revive demand for risk assets broadly, with Bitcoin benefiting alongside equities and other higher-beta investments.
Institutional interest has also strengthened meaningfully this week.
According to data from Farside Investors, US spot Bitcoin exchange-traded funds recorded net inflows of $753.73 million on Tuesday, marking the largest single-day inflow since October 6.
The surge in ETF demand followed several weeks of choppy flows and suggests that large investors are once again increasing exposure to Bitcoin.
Market participants said that if this pace of inflows continues, it could provide sustained support for prices and help extend the current rally.
The renewed demand from ETFs adds to the view that institutional participation remains a key driver of Bitcoin’s medium-term trajectory.
Macro backdrop improves risk sentiment
The rally followed the release of US consumer price index data on Tuesday, which showed inflation cooling more than expected.
The data bolstered expectations that the Federal Reserve could have greater room to ease policy later this year, a backdrop that typically supports risk assets such as cryptocurrencies.
At the same time, analysts at K33 Research highlighted a series of upcoming macro and policy-related events that could act as catalysts for Bitcoin.
In a report published Tuesday, the firm pointed to developments around tariffs, Federal Reserve independence, and crypto regulation as potential drivers of increased volatility.
The report noted that Bitcoin’s price has lagged US equities in recent months, even as the S&P 500 continued to rally.
The BTC/SPX ratio has remained locked in a three-month consolidation range, suggesting that Bitcoin’s relative performance versus stocks has been stagnant.
According to K33 Research, the cluster of upcoming macro events could prompt a sharp directional move if that relationship breaks.
Bitcoin’s technical indicators turn bullish
From a technical perspective, Bitcoin’s recent price action has improved notably.
After finding support around $90,000 on January 8 — a level corresponding to a previously broken consolidation zone — the cryptocurrency stabilised and began to recover through the start of the week.
On Tuesday, Bitcoin climbed more than 4% and closed above the 61.8% Fibonacci retracement level at $94,253.
That retracement is measured from the April low of $74,508 to the October all-time high of $126,199.
As of Wednesday, Bitcoin was trading near $95,000 to $97,000, consolidating gains above that key technical threshold.
If the rally continues, traders say the next major psychological target sits at $100,000, a level Bitcoin has failed to reclaim since slipping below it on Nov. 13 last year.
Momentum indicators support the bullish case. The Relative Strength Index on the daily chart stood at 65, above the neutral 50 level and trending higher, signalling strengthening bullish momentum.
Meanwhile, the Moving Average Convergence Divergence indicator continues to show a bullish crossover, with rising green histogram bars above the zero line, reinforcing the positive outlook.
Market participants eye $100,000 test
Some market participants are increasingly confident that a test of six-figure prices could be imminent.
MN Trading Capital’s Michaël van de Poppe said in a post on X on Tuesday that it was “quite clear that this is going to run to $100K in the coming week and that dips are for buying.”
He added that “the bull market hasn’t died, it’s about to start.”
Prediction markets also reflect growing optimism, though expectations remain mixed.
According to Polymarket, Bitcoin has a 60% probability of reclaiming $100,000 by February 1 and a 23% chance of reaching $105,000.
Historically, January has been a modest month for Bitcoin, delivering an average gain of 4.18% since 2013.
February, by contrast, has tended to be much stronger, with average returns of 13.12%.
Crypto analytics firm Santiment said that a move back toward $100,000 could reignite retail interest.
“There will likely be retail FOMO creeping in if crypto’s top asset begins teasing $100K in the next few days,” the firm said in a post on X.