Bitcoin is showing early signs of a trend reversal to the upside. The structural shift is being brought upon by a set of converging factors.
This includes yesterday’s softer U.S. CPI data, a renewal of significant spot ETF inflows and a sizable short squeeze.
After 57 days of consolidation, Bitcoin has closed a daily candle above the key resistance of $95K. January 13th saw Bitcoin rally by 4.6%, hitting a high of $96,250, a price level not seen since November 16th. At the time of writing, BTC is now up +8.77% in 2026.
This price move is a potential setup for a bigger breakout on Bitcoin. Having said that, a hold of the $95K level and successfully reclaiming certain overhead resistance would strengthen the bull case even further. Spot volumes are also ticking up higher to levels not seen since December 1st, suggesting renewed participation.
Also worth noting is that there is currently a narrative brewing from fiat currency risk, policy uncertainty and credibility, all leading to a repricing of real assets. This can be seen by the way in which prices are rallying in commodity assets like Gold and Silver. This backdrop is structurally supportive for Bitcoin, which is why many analysts are viewing this as a potential BTC catch up trade.
CPI Pressure was Reduced
The U.S. CPI (Consumer Price Index) numbers came in yesterday with slightly cooler than expected readings. CPI is one of the primary indicators to assess U.S. inflation and helps with monetary policy and interest rate decisions. The data basically shows the average change in prices paid by consumers for goods and services. Headline CPI accounts for overall inflation, including volatile components like food and energy sectors, while core CPI strips away these categories to provide longer term price pressures.
Headline CPI came in line with expectations at +2.7% YoY while core CPI came in at +2.6%, lower than expectations. This means that inflation isn’t accelerating but not gone either. Notably, however, core CPI has now dropped to its lowest levels since March 2021. Despite the softer readings here, there is an overwhelming consensus that the U.S. will not cut rates this month. The data rather keeps the Federal Reserve in a wait and watch mode.
This resulted in a Bitcoin bounce because it signals that the potential of a renewed tightening cycle could very well be over and shows the directionality of gradually easing inflation.
BTC Spot ETF Inflows Reached a Three-Month High
After four consecutive days of U.S. BTC spot ETF outflows, demand has started to tick positive again. On January 13th, Spot Bitcoin ETFs recorded $753.73 million inflows, with Fidelity’s FBTC leading it with $351.36 million.
This marked the strongest single day demand signals for institutional BTC exposure so far this year and a level of inflows we haven’t seen since October 7th last year.
Market Structure Appearing to Adjust
Bitcoin was largely rangebound between the levels of $80.5K to $95K since November 16th. Yesterday marked the first daily close above the key resistance upper band. From a charting perspective, Bitcoin broke out of the ascending triangle, a bullish technical analysis pattern, with significant volume and is now likely to retest this as support.
Now from a longer term outlook, there are two indicators that are flashing a potential bullish reversal. On the weekly time frame, the RSI is showing a hidden bullish divergence while the MACD indicates that selling pressure is clearly slowing with momentum shifting toward stabilization.
What Would Confirm the Shift
Momentum is certainly building, but admittedly, to categorically call this a confirmed trend reversal would require further confirmation across price structure, volume and steady demand.
The line in the sand from a price perspective in the short term remains the psychological level of $100K. This also coincides around the 200 day EMA. Just above this level, at $101K, sits the 50 week SMA which has tended to act as a very key long term support and resistance indicator for Bitcoin.