Bitcoin tops $97K as Bitcoin and Ethereum lead 2026’s first major crypto rally
Bitcoin and Ethereum led the first major crypto rally of 2026 as easing US inflation data, positive crypto ETF inflows and temporary regulatory optimism drove prices higher. Bitcoin rose above $97,000 after breaking the $95,000 resistance, triggering roughly $700 million in short liquidations and prompting some traders to target $100,000. Ethereum climbed about 5% to around $3,380, while Solana rallied to roughly $148 from a Jan. 8 low of $133. Contributing factors included a cooler-than-expected US CPI (core CPI 2.6%, monthly CPI 0.3%), and approximately $1.2 billion of inflows into cryptocurrency ETFs over five trading days, signaling institutional accumulation. Short-term bullish sentiment was briefly supported by progress on the Digital Asset Market Clarity Act (CLARITY Act), which aims to clarify SEC vs. CFTC jurisdiction and place many non-security tokens under CFTC oversight. Momentum cooled after Coinbase CEO Brian Armstrong publicly withdrew support for the bill’s initial draft—citing issues like potential government access to DeFi users’ data and problematic provisions—delaying the bill’s markup. The Fear & Greed Index sits at 54 (neutral), up from the low 20s in December, indicating improving but cautious sentiment. Near-term catalysts to watch: further CPI and labor data, Fed rate-cut guidance, institutional ETF flows, and developments around the CLARITY Act. Traders should monitor liquidity, short positions, and regulatory signals for potential renewed rallies or pullbacks.
Bullish
The net effect of the report is bullish. Key drivers—cooling US inflation (core CPI 2.6%), sizable ETF inflows (~$1.2B over five days), and a breakout above a persistent $95,000 resistance—are classic catalysts for risk-on moves and forced short-covering (roughly $700M liquidated). Historically, similar macro-driven CPI improvements and institutional inflows have preceded multi-week rallies in BTC and ETH. Regulatory developments initially added upside by reducing uncertainty (CLARITY Act progress), though rollback of immediate support by Coinbase CEO Brian Armstrong introduced short-term friction. For traders: expect continued short-term upside if follow-up macro data (inflation, labor) and persistent ETF demand hold; watch $100K as a psychological/technical target for BTC and $3.5K+ for ETH as potential extension zones. Conversely, regulatory setbacks or weaker-than-expected institutional flows could trigger quick pullbacks; the neutral Fear & Greed reading (54) suggests momentum exists but participants remain cautious. Overall, the balance of macro, liquidity and positioning points to a bullish bias in the near to medium term, while long-term direction will hinge on sustained institutional adoption and clear regulatory outcomes.