Bitcoin climbed above $97,000 in early Thursday trading, extending a recovery that has seen the cryptocurrency bounce sharply from lows below $87,000 earlier this month. The rally comes despite significant outflows from spot Bitcoin ETFs, suggesting that underlying demand dynamics remain robust even as institutional flows have temporarily reversed.

The Recovery Rally

The largest cryptocurrency by market capitalization traded at approximately $97,200 in Asian morning hours, up 0.9% over the previous 24 hours. The move extends Bitcoin's recovery from the $86,500 low touched on January 9th, when concerns about Federal Reserve policy and fading rate-cut expectations triggered a broad crypto selloff.

"Bitcoin is demonstrating resilience that's surprised even bullish observers," noted Matthew Sigel, head of digital assets research at VanEck. "The pullback could have been much worse given the macro headwinds, but buyers continue to emerge at lower levels."

The recovery has been methodical rather than explosive, with Bitcoin grinding higher over several sessions rather than staging a sharp V-shaped bounce. This pattern suggests accumulation by longer-term holders rather than speculative FOMO (fear of missing out) buying.

The ETF Outflow Paradox

Bitcoin's strength is particularly notable given recent outflows from spot Bitcoin ETFs. During a four-day losing streak in the funds, approximately $1.3 billion exited—erasing nearly all of the collective $1.5 billion in inflows accumulated since January 1st.

The outflows highlight the distinction between different types of Bitcoin investors. ETF buyers tend to be shorter-term oriented traders who respond quickly to price momentum and macro sentiment. When prices fall or risk appetite decreases, these holders are quick to sell.

Meanwhile, other categories of Bitcoin holders appear to be accumulating. Glassnode data shows that profit-taking pressure has largely subsided, with long-term holders actually adding to positions during the recent weakness. This divergence between ETF flows and underlying accumulation explains how prices can rise even as ETF headlines appear negative.

The Safe-Haven Narrative Returns

Bitcoin's appeal as a hedge against traditional financial system risks has gained renewed traction in recent weeks. Several developments have reinforced this narrative:

Federal Reserve Independence Concerns: The Justice Department's investigation of Fed Chair Jerome Powell has raised questions about central bank independence that foundational to confidence in fiat currencies. While Bitcoin doesn't directly benefit from Fed drama, any event that undermines trust in institutions strengthens the case for decentralized alternatives.

Gold's Record Run: The simultaneous surge in gold prices above $4,600 confirms that investors are actively seeking protection from macro risks. Bitcoin, often described as "digital gold," benefits from the same forces driving precious metals higher.

Geopolitical Uncertainty: From tensions with Iran to trade policy volatility, global instability supports assets that exist outside traditional financial systems. Bitcoin's borderless, permissionless nature appeals to those concerned about geopolitical risks.

"We're seeing Bitcoin trade more like gold and less like a tech stock," observed Galaxy Digital's Mike Novogratz. "When people worry about the system, they want assets the system can't touch. That's Bitcoin's value proposition."

Technical Picture Improves

From a technical analysis perspective, Bitcoin's price action has turned constructive. The cryptocurrency has reclaimed its 50-day moving average and is approaching the short-term holder cost basis near $99,000—a level that, if decisively broken, would signal renewed confidence.

Support zones have been established between $90,000 and $91,000, where Fibonacci retracements intersect with previous trading ranges. The fact that Bitcoin held above this area during the recent pullback is viewed as encouraging by chart-focused traders.

Upside resistance exists in the $97,000-$100,000 range, where many recent buyers are positioned near breakeven. A sustained move through this supply zone would likely trigger additional buying as sentiment shifts from cautious to confident.

Institutional Landscape Evolves

Despite short-term ETF outflows, the institutional landscape for Bitcoin continues to mature. Spot Bitcoin ETFs have crossed $118 billion in total assets, establishing cryptocurrency as an permanent part of the investment menu for financial advisors and institutional allocators.

The existence of regulated, accessible investment vehicles means that the next wave of institutional capital can enter more easily than ever before. Pension funds, endowments, and family offices that couldn't justify direct Bitcoin ownership can now allocate through familiar structures.

"The infrastructure for institutional adoption is largely built," noted Fidelity Digital Assets president Tom Jessop. "What remains is time—time for investment committees to become comfortable, time for track records to accumulate, time for crypto to demonstrate its role in portfolios."

Regulatory Clarity on the Horizon

The evolving regulatory landscape represents another potential catalyst. Two Senate committees are holding historic markup sessions on cryptocurrency legislation this week, potentially advancing bills that would provide clearer rules for digital assets.

The "Crypto Market Clarity Act" currently under consideration would establish frameworks for determining when tokens are securities versus commodities, resolve jurisdictional disputes between the SEC and CFTC, and provide guardrails for stablecoin issuers. Passage of comprehensive regulation could unlock additional institutional participation.

"Regulatory clarity is the biggest unlock for crypto in 2026," predicted Coinbase CEO Brian Armstrong. "Once institutions know the rules, they'll participate more actively. Right now, many are waiting on the sidelines for that clarity."

Price Outlook

Analyst price targets for Bitcoin vary widely, reflecting the inherent uncertainty in valuing an asset class still finding its place in global finance. Bulls point to limited supply, growing adoption, and macroeconomic tailwinds as reasons to expect new all-time highs. Bears cite regulatory risks, competition from other cryptocurrencies, and potential economic recession as concerns.

Standard Chartered analysts have maintained their forecast that Bitcoin could reach $500,000 by the end of 2030, implying substantial upside from current levels if the long-term thesis plays out. Nearer-term, predictions of $105,000-$110,000 by mid-2026 are common among bullish analysts.

"The risk-reward from current levels remains attractive for long-term holders," concluded Sigel of VanEck. "Short-term volatility is unavoidable, but the structural case for Bitcoin gets stronger with each passing year."

What to Watch

Key developments that could influence Bitcoin's trajectory include:

  • ETF Flow Reversals: A return to sustained inflows would signal renewed institutional appetite
  • Federal Reserve Communications: Dovish signals supporting eventual rate cuts would benefit risk assets including crypto
  • Regulatory Progress: Advancement of crypto legislation would provide clarity that institutions crave
  • Technical Breakout: A decisive move above $100,000 would likely accelerate momentum buying

For now, Bitcoin's ability to recover despite ETF headwinds suggests underlying strength in the market. Whether this resilience translates into new highs depends on factors both within crypto and across the broader financial landscape.