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Bitcoin’s January rally has lost traction, with the leading cryptocurrency retracing more than 10% from its mid-month peak as institutional demand softens and exchange-traded fund (ETF) flows turn decisively negative.
Bitcoin Range Holds as ETF Redemptions Weigh on Market Confidence
According to Bitfinex’s latest Alpha report, bitcoin failed to sustain a breakout above the $95,000–$98,000 resistance band, topping out at $97,850 before sliding back into its established trading range. The pullback erased all year-to-date gains and pushed prices back below the yearly open, underscoring what analysts describe as a “fragile equilibrium” between buyers and sellers.
The retracement has coincided with sustained selling pressure from U.S.-based spot bitcoin ETFs. Bitfinex data show more than $1.3 billion in cumulative ETF outflows over the past week, including five consecutive days of net redemptions across all major providers. Analysts said the breadth and consistency of those outflows point to coordinated de-risking rather than routine fund rotation.
“In the absence of renewed ETF inflows, upside attempts remain vulnerable to failure,” Bitfinex analysts wrote, adding that institutional demand has “softened materially at current price levels.”
Onchain metrics suggest that short-term holders are absorbing most of the recent downside. Bitcoin’s price has repeatedly stalled near the short-term holder realized price, a level that has acted as a key pivot across multiple market cycles. Bitfinex noted that while downside moves continue to find buyers, upside progress has been “consistently met by distribution from prior-cycle buyers,” particularly those who accumulated during the first three quarters of 2025.
Derivatives positioning, however, has remained comparatively orderly. Open interest in perpetual contracts declined by more than 4%, or roughly $1.18 billion in notional terms, following bitcoin’s January high. Analysts described the reset as constructive from a market-structure perspective, even as spot market participation cooled.
Options markets are telling a similarly nuanced story. One-week at-the-money implied volatility jumped by more than 13 points following the recent sell-off, while three-month implied volatility rose only marginally and six-month volatility remained largely unchanged. That steepening at the front end of the curve points to tactical hedging rather than broad repositioning.
Bitfinex analysts said:
“This pronounced steepening at the short-dated end of the curve indicates that market participants are responding tactically rather than reassessing medium-term risk assumptions. When adjustments are confined to near-term implied volatility, it typically reflects event-driven uncertainty rather than the onset of a broader volatility regime shift.”
In other words, traders appear to be bracing for headlines, not rewriting their long-term playbooks. Bitfinex added that “the options market is pricing transitory risk rather than a sustained disruption to market structure,” noting that expectations further out the curve remain largely intact despite elevated near-term noise.
Macro conditions have added to that uncertainty. Geopolitical tensions earlier this month, driven by renewed tariff threats linked to U.S. strategic ambitions in Greenland, briefly sparked a risk-off move across global markets. While those tensions have since eased, Bitfinex said the episode reinforced a broader repricing of risk already underway in equities, bonds and currencies.
Also read: Blackrock Pushes Deeper Into Bitcoin, Filing ETF Built for Both Exposure and Income
Despite the pullback, analysts stressed that corrections of this magnitude are not unusual during broader uptrends. What matters, they argue, is whether spot demand returns in force. Without that catalyst, bitcoin appears set to churn sideways rather than resume its advance.
“Having fallen back into the established $85,000–$94,500 range, stronger spot demand is needed to support a more durable breakout,” the report said, warning that repeated failures near resistance historically extend consolidation phases rather than resolve them quickly.
For now, the market appears stuck in a holding pattern: sellers are active, buyers are selective, and volatility is flashing warnings without declaring an outright regime change. Until ETF flows reverse or spot buying regains momentum, bitcoin’s next decisive move may remain frustratingly out of reach.
FAQ ❓
- Why did bitcoin pull back from its January high? Bitcoin retraced after failing to hold resistance near $98,000 amid ETF outflows and fading spot demand.
- How much money has left bitcoin ETFs recently?Spot bitcoin ETFs recorded more than $1.3 billion in net outflows over five consecutive trading days.
- What does the options market signal right now?Short-dated volatility has spiked, indicating tactical hedging tied to near-term uncertainty rather than long-term fear.
- What price range is bitcoin likely to trade in?Bitfinex expects bitcoin to remain range-bound between $85,000 and $94,500 without a clear demand catalyst.