Bitcoin Tops $94,000: ETF Inflows and Short Squeeze Fuel Rally

Bitcoin ripped through the $94,000 mark on Jan. 5, hitting a level it hadn’t seen since early December and adding a whole lot of adrenaline to crypto Twitter. The move came quick — about $100 billion was added to the total crypto market cap in roughly a day — and it left traders blinking at their screens and wondering who ordered the rocket fuel.

Why Bitcoin popped to $94,000

A handful of things collided to make this move happen. Big-picture: U.S. spot Bitcoin ETFs saw unusually large inflows on Jan. 2 — roughly $471 million — with major products like BlackRock’s IBIT leading the pack. That institutional demand landed right when market liquidity was thin after the holidays, so even moderate buying pushed prices harder than usual.

Derivatives traders piled on top of that. Call options clustered around the $100,000 strike, overall January options open interest climbed to around $1.45 billion, and options activity combined with heavy short positions created a textbook short squeeze. Data showed about $438 million in short positions got liquidated in a single 24-hour stretch, forcing more buy orders and amplifying each upward tick because the order books were skinny.

Macro forces helped, too. Softer-than-expected U.S. manufacturing data nudged markets toward the idea that the Federal Reserve might be more relaxed about tightening — a setup that often helps risky assets. At the same time, a geopolitical flare-up involving U.S. operations in Venezuela raised risk awareness, prompting investors to shuffle money between stocks, gold, and crypto. The result: flows into both growth and defensive bets, and Bitcoin got a piece of the action.

The broader market rode Bitcoin’s coattails — total crypto market cap jumped about 3.1% to roughly $3.3 trillion. Ethereum moved up as well (trading near $3,244), XRP had an outsized move (around an 11.5% gain to about $2.33), Solana, Cardano, Dogecoin, and BNB all posted modest gains too.

What happens next (yes, it’s still risky)

Can Bitcoin hold above $94,000 and march toward $100,000? That depends on whether ETF inflows keep up and whether macro conditions stay friendly. If institutional buying continues and liquidity remains light, the path upward is open. But geopolitical shocks or a reversal in macro sentiment could quickly take the wind out of the rally.

Technicals show Bitcoin reclaimed levels it hadn’t consistently held since mid-December, but markets have a memory for shakeouts — a dip back to the high $80,000s could flip the story and trap leveraged buyers. Options positioning looks bullish for now, with traders betting on more upside into January expiries, so keep an eye on open interest and liquidation activity; those numbers tend to turbocharge moves in either direction.

In short: a mix of fresh ETF demand, aggressive derivatives positioning, and thin post-holiday liquidity turbocharged Bitcoin’s jump. It’s exciting, chaotic, and volatile — exactly the kind of drama crypto excels at. Not financial advice: trade carefully, don’t bet your rent, and maybe keep a hot beverage nearby for the next roller-coaster session.