Why Bitcoin’s next price breakout hinges on BTC ETF flows

The performance of U.S. spot Bitcoin exchange-traded funds (ETFs) continues to offer valuable insight into Bitcoin’s [BTC] probable directional bias.

As gateways for institutional participation, ETF flows have become a critical liquidity signal for the broader market.

At press time, Bitcoin traded at a particularly sensitive level, hovering between the $90,000 and $100,000 range. At this midpoint, ETF activity could play a decisive role.

If the bulls regain momentum, they may finally challenge the trend. However, bears have largely controlled price action since October. Their continued pressure could suppress any upside attempts.

ETF flows are becoming Bitcoin’s primary liquidity signal

The narrative around Bitcoin liquidity returning through ETF remains complex, marked by alternating periods of accumulation and distribution.

On the 16th of January, the session ended with net outflows of about $394 million, signaling renewed selling pressure. This came just a day after the market recorded a net inflow of $100.18 million.

Despite the day-to-day volatility, the broader picture shows cumulative weekly inflows reaching $1.4 billion for the first time in several weeks.

This ongoing rotation between buyers and sellers makes it difficult to define Bitcoin’s immediate directional bias with certainty.

However, recent analysis from CryptoQuant suggests that Fidelity’s and Ark Invest’s U.S. spot Bitcoin ETFs may offer clearer directional signals than headline ETF flows alone.

According to the report, Fidelity’s FBTC and Ark’s ARKB exhibit a relatively strong correlation with Bitcoin’s price movements.

“Bitcoin’s price has closely followed the cumulative flows of FBTC and ARKB.”

This relationship suggests that flows into and out of these ETFs provide a more refined lens for assessing Bitcoin’s underlying demand. Their performance offers additional context, particularly when evaluating medium- to long-term price trends rather than short-term volatility.

FBTC and ARKB point to slowing institutional momentum

Flow and price behavior across FBTC and ARKB suggest that Bitcoin’s next sustained upside move may not yet be in place. Instead, current conditions point to continued consolidation or weakness in the near term.

This assessment is rooted in liquidity trends across both ETFs. FBTC has not recorded a new all-time high since March 2025, while ARKB has trended lower since July.

These patterns indicate that institutional capital inflows have slowed materially compared to earlier phases of the rally.

Source: CryptoQuant

Given Bitcoin’s tendency to track the movement of these ETFs, persistent weakness in FBTC and ARKB implies that upside momentum in Bitcoin may remain limited.

A downtrend in ETF liquidity does not typically support the formation of new price highs in the underlying asset.

The report also highlighted that this type of correlation is not unprecedented, drawing comparisons to Bitcoin’s relationship with Strategy’s MSTR in 2024.

After reaching a peak, MSTR failed to establish higher highs and entered a sustained decline, reflecting capital rotation out of the asset. Bitcoin followed a similar path during the same period, reinforcing the role of correlated liquidity signals.

Source: CryptoQuant

This historical parallel suggests that continued capital outflows could place further pressure on Bitcoin’s price. Even if short-term rebounds occur, sustained upside would likely require a clear reversal in ETF flow trends.

Without such a shift, any near-term strength may give way to longer-term consolidation or downside risk.

IBIT’s market impact differs despite its dominant size

BlackRock’s U.S. spot Bitcoin ETF, IBIT, remained the dominant product by net asset value, holding approximately $74.57 billion as of writing.

This compares with Fidelity’s FBTC, the second-largest U.S. Bitcoin ETF, which stood at $18.97 billion. However, IBIT’s market impact differs in structure and execution.

According to the report, a significant portion of IBIT’s activity is conducted through over-the-counter transactions. As a result, many of these trades do not directly affect spot market pricing in the same way as on-exchange ETF flows.

Source: CryptoQuant

Even so, IBIT has played a stabilizing role during periods of market stress, helping to limit sharper downside moves as liquidity exits the market.

That said, IBIT has also begun to experience outflows, aligning with the broader slowdown in institutional capital across the Bitcoin market.

On-chain and ETF holding data show that Bitcoin’s aggregate holding trend continues to decline and has now returned to levels last observed in May 2024.

This reinforces the view that selling pressure and reduced liquidity remain persistent headwinds for price recovery in the near term.

Final Thoughts

• Fidelity’s FBTC and Ark Invest’s ARKB U.S. spot Bitcoin ETF remain key instruments to watch when assessing Bitcoin’s next potential price swing.
• U.S. spot Bitcoin ETFs recorded $1.8 billion in net inflows over the past week, signaling a temporary easing of selling pressure.