BTC Surpasses $97,000 as Crypto Market Faces Structural Turning Point

Original | Odaily Planet Daily (@OdailyChina)

Author | Dingdong (@XiaMiPP)

Following yesterday's strong breakout of BTC above the key resistance level of $95,000, BTC continued its upward momentum this morning, reaching a high of $97,924, and is currently trading at $96,484. ETH has broken above $3,400 and is currently at $3,330. SOL's price surged to a high of $148 and is now at $145. In comparison to BTC,ETH and SOL are still hovering around key resistance zones., has not yet formed a clear trend breakthrough.

In terms of derivatives, according to Coinglass data, the total liquidations across the entire network reached $680 million yesterday, with short positions liquidations amounting to $578 million and long positions liquidations at $101 million. Glassnode posted that,Market rebound leads to highest short-position liquidation volume since the "1011 crash".

According to data from msx.com, the three major U.S. stock indices closed lower at the end of the trading session, but stocks related to the cryptocurrency sector generally rose. ALTS surged more than 30.94%, and BNC climbed over 11.81%. This situation is relatively rare. What is the driving force behind such a strong rally in the crypto market?

From a funding perspective, since mid-October 2025, BTC spot ETFs have generally experienced net outflows or only minor net inflows, indicating a weak market condition with a lack of clear signals for incremental capital inflows. However, in the past week, after four consecutive days of net outflows, BTC spot ETFs have turned to two consecutive days of net inflows, including... On January 13th, the net inflow for a single day reached as high as 750 million USD., becoming an important signal for this stage. In contrast, ETH spot ETFs still show weak performance.

From the price action, a noteworthy change is taking place.Bitcoin's cumulative return during the North American trading session was approximately 8%, while it only recorded a modest gain of about 3% during the European session, and the Asian trading session even dragged down the overall performance.

This phenomenon stands in sharp contrast to the end of 2025. At that time, Bitcoin fell as much as 20% during the North American session, with prices once retreating to around $80,000. In the fourth quarter, the U.S. market's opening session was often accompanied by selling pressure, and the spot Bitcoin ETFs experienced almost daily outflows of funds.

Currently, the strongest returns occur shortly after the U.S. stock market opens, while over the past six months, this period has precisely been the weakest for Bitcoin's performance.

On a macro level, the CPI annual growth rate for December, released this week, remained at 2.7% (unchanged from the previous reading and in line with market expectations), while the core CPI annual growth rate slightly increased to 2.7% (from 2.6% previously, slightly exceeding some forecasts), indicating that inflationary pressures remain somewhat persistent. However, the PPI annual growth rate for November unexpectedly rose to 3.0% (higher than the expected 2.7%), and retail sales also recorded a strong monthly growth (surpassing market expectations). The robust performance of consumption data to some extent supports the view that economic growth still maintains resilience.

Although the December CPI data as a whole was relatively mild (a 0.3% month-on-month increase in line with expectations, and the annual rate did not accelerate further), inflation has not yet clearly receded to the Federal Reserve's comfort zone. Combined with the resilience of the labor market shown in previous employment reports, the market generally believes that the probability of the Fed maintaining interest rates unchanged at the policy meeting in early January is extremely high, with almost no expectation of a rate cut. This also means that catalysts for near-term policy easing remain scarce. According to the CME's "FedWatch," the probability of the Fed keeping interest rates unchanged in January has reached 95%.

However,The expectation of interest rate cuts by 2026 is worth anticipating. Fed Governor Mester reiterated that 150 basis points of rate cuts are needed this year.

Beyond short-term market trends, the most significant medium- to long-term variable to watch recently is the legislative progress of the CLARITY Act. This bill aims to establish a comprehensive regulatory framework for the U.S. cryptocurrency market. Its main objectives include:

• Clarify the regulatory boundaries between the SEC (security-type assets) and the CFTC (commodity-type digital assets);
• Clearly classify digital assets (securities, commodities, stablecoins, etc.);
• Introduce stricter information disclosure, anti-money laundering, and investor protection requirements, while reserving space for innovation.

With the Senate Banking Committee revising and voting scheduled for January 15, U.S. cryptocurrency legislation has officially entered the "final sprint" phase. On January 13, the committee's Republican chair, Tim Scott, released a 278-page revised text that had undergone months of bipartisan closed-door negotiations. The release quickly triggered over 70 (some counts say 137) proposed amendments, as tensions over stablecoin yields and DeFi regulation intensified. The cryptocurrency industry, banking lobbying groups, and consumer protection organizations have all fully engaged in the debate.

Moreover, the cryptocurrency industry itself has not reached a unified position. On January 14, Coinbase CEO Brian Armstrong publicly announced his withdrawal of support, stating that after reviewing the text, he found the bill to have "too many problems, including DeFi bans, the suppression of stablecoin reward mechanisms, and excessive government surveillance, making the situation worse than the current state." He emphasized that Stand With Crypto would score the revised vote scheduled for Thursday, testing whether senators stand "on the side of bank profits or on the side of consumer and innovation incentives." Industry insiders believe that Coinbase's public opposition is "highly significant" and could determine the bill's fate.

After Coinbase publicly expressed opposition, several leading institutions and associations, including a16z, Circle, Kraken, Digital Chamber, Ripple, and Coin Center, openly supported the Republican version of the Senate bill, arguing that "any clear regulations would be better than the current situation," which could inject long-term certainty into the market and position the U.S. as the "global capital of cryptocurrency."(Recommended reading:Why has there been such a significant divide in the industry over the sudden postponement of the CLARITY review?）

Ethereum staking demand continues to strengthen. Currently, the amount of ETH locked in the Beacon Chain has exceeded 36 million, accounting for nearly 30% of the network's circulating supply. This corresponds to a staking market value of over $118 billion, setting a new all-time high. The previous highest percentage was 29.54%, recorded in July 2025. The Ethereum network currently has approximately 900,000 active validators, while around 2.55 million ETH are still queued and waiting to enter the staking queue. This suggests that, at least from an on-chain behavior perspective,The short-term selling intentions of existing stakers remain limited, and the network as a whole is more inclined to "lock up rather than release" assets.

In addition, developer activity on Ethereum and stablecoin trading volume have both reached record highs. Recommended reading:ETH Staking Data Reversal: Exit and Zeroing Out VS Influx Surges by 1.3 Million, When to Bottom-Fish?》

Bitcoin Reserve company Strategy (formerly MicroStrategy) continued its long-term accumulation strategy this week, spending approximately $1.25 billion to purchase 13,627 BTC at a price of around $91,519 each. As a result, its total Bitcoin holdings have increased to 687,410 BTC, valued at approximately $65.89 billion, with an average cost per holding of about $75,353.

Recently, investment bank TD Cowen lowered its 12-month price target for Bitcoin from $500 to $440, citing the dilutive effects from the ongoing issuance of common and preferred shares, which have weakened Bitcoin's yield expectations. Analysts expect that Grayscale's Bitcoin Trust (GBTC) may add approximately 155,000 Bitcoin holdings in the 2026 fiscal year, higher than previously forecasted. However, a higher proportion of equity financing will suppress the per-share growth in Bitcoin holdings.

TD Cowen also pointed out that despite downward pressure on short-term yields, relevant metrics are expected to improve in fiscal year 2027 as the price of Bitcoin recovers. The report also emphasized that Strategy continues to increase its holdings during recent Bitcoin price corrections, with most of the raised capital being directly used to purchase Bitcoin, demonstrating that its strategic objectives remain unchanged. Overall,Analysts still hold a relatively positive view on Strategy's long-term value as a "Bitcoin exposure tool," and believe that some of its preferred shares offer certain appeal in terms of income and capital appreciation.Regarding the index inclusion issue, MSCI has not yet excluded Bitcoin reserve-related companies from its index system, which is seen as a positive factor in the short term. However, uncertainties still exist in the medium to long term.

Arthur Hayes also stated that the core trading strategy for this quarter isGo long on Strategy (MSTR) and Metaplanet (3350) as leveraged positions to bet on BTC resuming its upward trend.

Overall, the cryptocurrency market is standing at an important inflection point. Whether the traditional "four-year cycle" remains valid may be revealed within the coming months.

In its latest review of the digital asset over-the-counter (OTC) market, crypto market maker Wintermute analyzed that in 2025, Bitcoin has not demonstrated the strong characteristics typically seen in a four-year cycle, while altcoin cycles have nearly vanished. The firm views this phenomenon not as a short-term fluctuation or timing misalignment, but rather as a deeper structural shift.

Under this premise, Wintermute believes that for a truly strong rebound to occur in 2026, the triggering conditions will be significantly higher than in previous cycles and will no longer depend on a single variable. Specifically, at least one of the following three outcomes must be validated.

First, the asset allocation scope of ETFs and crypto-native (DAT) companies must expand beyond Bitcoin and Ethereum. Currently, U.S. spot BTC and ETH ETFs objectively concentrate a large amount of new liquidity on a limited number of high-market-cap assets. While this enhances the stability of leading assets, it significantly narrows market breadth, leading to a severe divergence in overall market performance. Only when more crypto assets are included in ETF products or corporate balance sheets can the market potentially regain broader participation and a more robust liquidity foundation.

Secondly, core assets such as BTC, ETH, and BNB, SOL, etc., need to experience another sustained strong upward trend and reestablish a clear wealth effect. In 2025, the traditionally observed mechanism—where Bitcoin's rise leads to capital flowing into altcoins—has largely failed. The average upward cycle for altcoins has been compressed to about 20 days (compared to around 60 days in the previous year), and many tokens have continued to weaken under pressure from token unlocks. Without sustained strength in leading assets, capital is unlikely to spill over into smaller projects, making it difficult to ignite a broader altcoin rally.

Third and most crucially, retail investor attention needs to genuinely return to the crypto market. Although retail investors have not completely exited, their new capital is currently flowing more into high-growth themes such as the S&P 500, AI, robotics, and quantum computing. The extreme drawdowns, platform bankruptcies, and liquidation memories from 2022–2023, combined with the reality that crypto assets underperformed traditional stock markets in 2025, have significantly weakened the appeal of the narrative that "crypto equals quick wealth." Only when retail investors once again believe in the potential for outsized returns from the crypto market and return in a substantial and scalable manner can the market possibly regain the highly emotional and almost euphoric upward momentum it experienced in the past.

In other words, given that structural changes have already taken place, the future rebound is no longer a question of "whether it will come," but rather "under what conditions and through which path it will be reignited."