Bitcoin (BTC) surged this week, breaching the $96,000 mark as renewed institutional demand and easing inflation concerns lifted sentiment in cryptocurrency markets.

The move followed mighty inflows into U.S. Bitcoin Exchange spot funds and a lower-than-expected U.S. Consumer Price Index (CPI) report, which lowered expectations for an aggressive tightening of interest rates by the Federal Reserve.

The rally ended a prolonged consolidation phase that kept Bitcoin trading sideways for over a month. As prices broke through key resistance levels near $94,000-$95,000, compact sellers were forced to exit their positions, further fueling the rally.

BTC's price records vital gains on the daily chart. Source: BTCUSD on Tradingview

Bitcoin ETF Inflows Signal Institutional Return

place in the USA Bitcoin ETFs recorded a net inflow of $753.7 million on Tuesday, the largest single-day total since October. According to SoSoValue data, FBTC Fidelity is the leader with $351 million, followed by BITB Bitwise with $159 million and IBIT BlackRock with $126 million.

The surge suggests institutional investors are returning to cryptocurrency-related products following year-end portfolio adjustments and tax-related sales that hit the market in delayed 2025. Ether-focused ETFs also saw renewed interest, with net inflows of $130 million across five products.

Following this data, Bitcoin rose by around 3% to close to $94,600, while Ethereum gained over 6% to around $3,320. The broader cryptocurrency markets followed suit, pushing the total market capitalization above $3.3 trillion.

Inflation data supports risky assets

The latest US CPI report showed inflation holding steady at 2.7% year over year, largely in line with expectations. The lack of an inflation surprise reduced fears of further interest rate increases and reinforced the view that the Federal Reserve may shift toward interest rate cuts later in the year.

Lower real rate expectations tend to support risky assets, including cryptocurrencies, by reducing the opportunity cost of holding unprofitable assets such as Bitcoin. U.S. stocks also rallied, suggesting the rise in cryptocurrencies was part of a broader shift in risk attitudes rather than an isolated move.

Short liquidations add fuel to the rally

When Bitcoin broke above $96,000, bearish positions were wiped out. Data from Coin shows that over $290 million in compact Bitcoin positions were liquidated in 24 hours, compared to about $24 million in long liquidations. In the broader cryptocurrency market, compact liquidations totaled nearly $700 million.

Strong spot buying, growing interest in open trades and technical breakthroughs contributed to this move. Bitcoin is currently testing previous resistance levels as support, and chart patterns indicate a possible continuation towards the $105,000-$110,000 range if momentum continues.

While short-term consolidation near the $98,000-$100,000 zone is still possible, sustained ETF inflows, reduced selling pressure from long-term investors, and continued corporate accumulation suggest that underlying demand remains stable.

Cover image from ChatGPT, BTCUSD chart from Tradingview