TLDR:
- Bitcoin ETF products recorded $1.4 billion in weekly inflows, including a $760 million single-day surge Tuesday.
- Tariff announcements on European countries triggered rapid $850M liquidations, half across BTC and ETH trading pairs.
- Core CPI data showed inflation at 2.6% year-over-year, the slowest rate recorded since March 2021 supporting rally.
- Critical catalysts this week include Davos summit, EU emergency meeting, and Friday’s Core PCE inflation gauge.
Bitcoin surged past $95,000 for the first time since November, reaching near $98,000 on strong exchange-traded fund inflows and favorable inflation data.
The rally reversed sharply following tariff announcements, pushing prices back to $92,000 and triggering $850 million in long liquidations.
Market participants now await key macroeconomic data and policy developments this week.
ETF Demand and Inflation Data Drive Initial Rally
The digital asset broke through resistance levels that had contained prices throughout the previous months.
Three concurrent factors supported the upward movement. Exchange-traded fund products recorded $760 million in single-day inflows on Tuesday, accumulating $1.4 billion for the week.
Core Consumer Price Index data showed inflation at 2.6% year-over-year, marking the slowest pace since March 2021.
Bitcoin also began catching up to gold performance after trailing hard assets for several weeks. The combination created sustained buying pressure through midweek.
Weekend trading showed moderating momentum but maintained gains. Markets demonstrated relative stability until geopolitical developments shifted sentiment.
Institutional participation through regulated products reached levels not seen in recent months. The flow data suggested renewed confidence among traditional finance participants.
Spot bitcoin ETFs have become primary vehicles for institutional exposure. Trading volumes across these products increased alongside price appreciation.
Geopolitical Tensions Reverse Market Gains
Monday brought announcements of 10% tariffs on eight European countries over Greenland-related disputes, scheduled to escalate to 25% by June.
The European Union prepared €93 billion in retaliatory measures immediately. Iran-related tensions continued developing simultaneously. These headlines introduced significant risk-off sentiment across markets.
Bitcoin dropped from near $98,000 to $92,000 within hours as traders liquidated leveraged long positions. Half of the $850 million in liquidations occurred across bitcoin and ethereum pairs.
The rapid deleveraging indicated traders had increased margin usage during the rally. Crypto markets proved fragile following the break from a 50-day tight trading range.
Regulatory developments emerged alongside price action this week. The CLARITY Act encountered obstacles as Coinbase and White House representatives disagreed over stablecoin yield provisions.
Goldman Sachs confirmed active exploration of tokenization and stablecoin technologies. South Korea approved amendments establishing legal frameworks for tokenized securities.
The New York Stock Exchange announced exploration of 24/7 trading through tokenization platforms.
This week presents multiple catalysts for price movement. Tuesday marks the first full US trading session following Martin Luther King Jr. Day.
Trump attends the World Economic Forum in Davos for the first time in six years. Thursday brings an EU emergency summit addressing tariff measures.
Friday delivers Core Personal Consumption Expenditures data, the Federal Reserve’s preferred inflation gauge.
A pending Supreme Court ruling on presidential tariff authority could create additional volatility affecting trade policy expectations.
