BTC Breaks Through $90,000: Institutional Funds Reflow and Macro Positive Factors Combine

Bitcoin (BTC) prices have broken the $90,000 threshold for the first time since mid-December 2025, currently quoted at $91,313.75, with a 24-hour increase of 1.57%. This rebound is driven by multiple factors, including the return of spot ETF funds, improved macro liquidity, and regulatory expectations. Notably, the US spot Bitcoin ETF market recorded approximately $459 million in net inflows during the week ending January 2, after two consecutive weeks of outflows, serving as a key support.

Institutional Fund Reflows: From Outflows to Net Inflows

The movement of funds in spot ETFs often reflects the true stance of institutional investors. Recent reports show that leading institutional products have become the main drivers of this rebound. iShares Bitcoin Trust and Fidelity Bitcoin ETF each saw net inflows of several hundred million dollars, marking a significant shift.

Why Institutional Buying Is So Critical

Continuous buying of spot ETFs directly impacts Bitcoin’s supply and demand structure. When institutions buy large amounts via ETFs, it’s equivalent to absorbing liquidity from the market, which can push prices higher and stabilize support levels. Data shows that a weekly net inflow of $459 million is sufficient to support BTC’s steady position around $90,000.

In contrast, the previous two weeks of outflows had raised concerns about institutional confidence. The current shift indicates that institutional investors’ confidence in Bitcoin’s short- to medium-term outlook is recovering. This recovery is not blind but based on improved macroeconomic conditions.

Macro Liquidity: Easing Yen Arbitrage Risks

The macro factors mentioned in recent reports are also significant. Recently, the yield on 10-year Japanese government bonds has fallen from high levels, and the USD/JPY exchange rate has weakened again, alleviating concerns about concentrated short positions in yen arbitrage trading.

What is Yen Arbitrage Risk of Liquidation?

Yen arbitrage involves borrowing yen in Japan’s low-interest environment and investing in higher-yield assets (such as cryptocurrencies). When the dollar appreciates and the yen depreciates, these trades face significant liquidation pressure, often triggering market sell-offs. Yen arbitrage liquidations have been a major cause of multiple sharp declines in 2024.

Today’s easing of yen appreciation pressure removes a key downside risk. Meanwhile, global liquidity expectations are improving, risk assets are attracting funds again, and Bitcoin, as a risk asset, is benefiting. Expectations of a Fed rate cut in March persist, further boosting risk appetite.

Regulatory Outlook: Signal for Long-term Capital Inflows

Policy news is also positive. Progress in US legislation on the crypto market structure has increased market expectations for compliance and long-term capital inflows. While the specifics and timing of such legislation remain uncertain, its advancement itself sends a signal: mainstream financial institutions are increasingly accepting cryptocurrencies.

If the legislation proceeds smoothly, it will help expand institutional participation in Bitcoin and the broader crypto market, improving the medium-term supply-demand landscape. This is one reason why institutional investors are increasing allocations now.

Market Sentiment: Extreme Fear and Temporary Oversold Conditions

Despite the clear price rebound, Bitcoin’s Fear & Greed Index remains in the “Extreme Fear” zone. What does this divergence between sentiment and price imply?

Meaning of Divergence

When prices rise but sentiment remains extremely fearful, it indicates that market participants have not yet fully believed in the sustainability of this rebound. Such skepticism leaves room for further recovery. Typically, extreme fear signals a temporary oversold condition, often followed by sentiment recovery and continued price gains.

From this perspective, breaking through $90,000 may just be the beginning of a recovery phase, not the end.

Technical Analysis: Key Moving Averages and Target Levels

On the technical side, Bitcoin is still oscillating below key moving averages. As long as the $90,000 support holds effectively, the short-term target could rise to $95,000, with a medium-term goal of $100,000 psychological resistance.

Risks and Opportunities

Conversely, if macro policies or ETF fund flows weaken again, there remains a risk of price retesting the $80,000 zone. This makes the current $90,000 a critical watershed—whether it can be effectively converted into support will determine Bitcoin’s next trend.

Additional data shows that a major whale withdrew 800 BTC from Bitfinex in the past 24 hours and accumulated 1,000 BTC over the past six days, worth approximately $89.04 million. Such accumulation behavior is often viewed as a bullish signal. Meanwhile, Tether purchased 8,888.8888888 BTC in Q4, further indicating institutional and large holder enthusiasm for Bitcoin.

Summary

Bitcoin’s breakthrough of $90,000 is not driven by a single event but results from the combined effects of spot ETF fund inflows, macro liquidity improvements, and regulatory expectations. Confidence among institutions is recovering, yen arbitrage risks are easing, policy positives are emerging, and oversold conditions amid extreme fear are supporting the rebound.

Whether $90,000 can be effectively sustained is crucial. If it holds, the short-term target could be $95,000, with a medium-term goal of $100,000. However, the extreme fear sentiment also reminds us that the sustainability of this rebound remains to be seen, especially with ongoing developments in ETF flows and macro policies.