Bitcoin breaks through $97,000! Nearly $800 million in shorts liquidated, is BTC returning to $100,000 soon?

Bitcoin broke out strongly this Wednesday, soaring to around $97,000, reaching a new high since mid-November last year. This sudden surge triggered a large-scale liquidation storm in the crypto market, with nearly $800 million in total liquidations across the network in the past 24 hours, of which 87% were from short positions.

The rally was driven by multiple positive factors: legislative progress on the U.S. “Clear Act” reshaped regulatory expectations; the latest CPI data showed inflation stabilizing, boosting risk assets; meanwhile, the U.S. Bitcoin spot ETF recorded a massive net inflow of $754 million in a single day, the best performance since October last year. On-chain data indicates that active buying in the spot market has regained dominance, ending a nearly two-month range-bound consolidation, with the market now eyeing the key psychological level of $100,000.

Bitcoin Breakout and Liquidation Storm: Shorts Face “Black Wednesday”

In January 2026, the crypto market experienced a landmark trading day. Bitcoin’s price broke through the multi-month consolidation upper boundary on Wednesday, reaching a high of $97,000, with an intraday increase of nearly 5%. This was not just a price rebound but a technical and market sentiment breakthrough. Since falling back from the all-time high of $126,000 in November last year, Bitcoin had undergone a prolonged consolidation between $88,000 and $94,000. The volume-driven rally officially marked the end of this consolidation phase and established a higher high.

The intense market volatility instantly turned into traders’ pain points, especially for those betting on a decline. According to data from Coinglass, total crypto contract liquidations across the network in the past 24 hours reached $789 million. This liquidation storm showed a clear “one-sided” trend: $690 million came from forced liquidations of short positions, while long liquidations amounted to only $99 million. This means over 87% of the liquidated funds came from bearish traders, and a targeted “strike” on shorts has already played out.

Key liquidation data for mainstream crypto assets

Asset Distribution:

• Bitcoin: Total liquidation $382 million, with $343 million from shorts, making it the most heavily impacted short position.
• Ethereum: Total liquidation $231 million, with $207 million from shorts.
• Solana: Total liquidation $33 million, with $27 million from shorts.
• XRP: Also saw significant liquidations, indicating broad market support for the rally.

Market Impact: Such massive concentrated liquidations, especially the passive closing of short positions (via buying contracts to close), created strong upward buying pressure in the short term, further accelerating the price rise and forming a “short squeeze” effect. This warns investors that in the highly volatile crypto market, high leverage contrarian trading carries destructive risks.

The Triple Drivers Behind the Rally: Policy, Inflation, and Capital Inflows

This rally is not without foundation but is driven by a “synergy” of macro, policy, and capital factors. First, the most direct catalyst comes from positive signals in U.S. crypto regulation. The much-watched “Clear Act” is currently in the final drafting and revision stage by the Senate Banking Committee, with a review scheduled for Thursday. This bill aims to clarify the structure of the U.S. digital asset market, offering a glimpse of regulatory framework implementation, greatly easing long-standing policy uncertainties, and boosting confidence among institutional and retail investors.

Second, macroeconomic “tailwinds” also support risk assets. The U.S. Consumer Price Index (CPI) report released Tuesday showed inflation trending toward stabilization. The expected CPI data eased concerns about the Fed potentially adopting a more aggressive monetary policy. This created a friendly macro environment for assets like Bitcoin, viewed as an inflation hedge and risk-on asset. Meanwhile, traditional safe-haven assets gold and silver hit new highs this week, reflecting complex global market sentiments about fiat currency value and economic outlook, with some funds seeking diversification.

Finally, the most compelling evidence comes from actual capital inflows. On Tuesday, the U.S. Bitcoin spot ETF recorded a staggering $754 million in net inflow in a single day, the highest since October last year. This massive influx of funds directly supported buy-side demand in the spot market, providing solid buying support for Bitcoin’s price. It clearly indicates that the rally is driven not just by derivatives trading but also by real demand in the spot market. This “spot-led, futures-following” pattern is generally considered healthier and more sustainable.

Technical Analysis and On-Chain Signals Confirming the Breakout

From a purely technical perspective, the validity of this breakout has been confirmed on multiple levels. The most critical point is that Bitcoin’s price has clearly exited the range-bound consolidation that lasted for weeks, accompanied by a significant increase in volume. Volume breakout is a key principle in technical analysis, indicating broad market participation rather than a false move created by liquidity-thin periods. This greatly reduces the likelihood of a “false breakout” and opens space for further upward movement.

Deeper insights come from on-chain data, revealing changes in market microstructure. According to CryptoQuant, the 90-day cumulative net buy/sell volume difference of spot Bitcoin turned positive in January. This indicator, called Taker CVD, measures the net buying or selling by “aggressive” traders willing to transact immediately at current market prices. Its positive and sustained value indicates that aggressive buyers are dominating, willing to pay higher prices to build positions quickly. This contrasts sharply with the “net selling” dominance during the correction from September to November last year, marking a fundamental shift in market momentum.

Additionally, the Accumulation/Distribution indicator continued to rise, providing further validation. It hit a local high of 5.05 million during the price breakout. This suggests that even as prices rose above resistance levels, net capital inflow persisted. Historically, rising prices accompanied by continuous accumulation imply broader market participation supporting the rally, rather than short-term speculation. These on-chain signals resonate with the technical breakout, jointly pointing to a conclusion: market dominance has shifted from hesitant sellers back to confident buyers.

Crypto Market Liquidation Mechanism: Why “Liquidation” Is a Double-Edged Sword

For readers unfamiliar with derivatives trading, “liquidation” might just be a term for huge losses. But understanding the liquidation mechanism is crucial for grasping market sentiment and health. In crypto derivatives trading, when a trader’s margin cannot cover potential losses, the exchange’s system automatically forces the liquidation of their position to prevent further losses. This process is called liquidation. When prices fluctuate sharply in one direction, it can trigger large chain liquidations.

Massive short liquidations, like this event, are a “double-edged sword.” In the short term, they create upward pressure by forcing shorts to buy to close positions, intensifying the price rally—this is the “short squeeze.” However, from a market health perspective, moderate liquidations help clear over-leveraged speculative positions, reducing systemic risk. Although this liquidation storm was brutal, it also significantly lowered overall market leverage, removing some obstacles for subsequent healthier gains. It serves as a reminder that in high-volatility crypto markets, using high leverage is akin to walking on a cliff edge—any sudden price move can lead to catastrophic consequences.

Bitcoin’s Path to $100,000 Reignited

With the critical resistance at $95,000 effectively broken and turned into support, the market’s focus naturally shifts to the next key psychological level—$100,000. According to data from the prediction platform Myriad, the probability of Bitcoin reaching $100,000 in the short term has risen to nearly 89%, a sharp 13% increase in the past 24 hours, reflecting rapidly warming market sentiment.

From a technical standpoint, the path is now clearer. The previous resistance zone at $94,000–$95,000 should now be viewed as the immediate support band. As long as prices can hold above this zone, the bullish structure remains intact. On the upside, the journey to $100,000 may not be smooth. This level is not only a psychological milestone but also likely to gather significant sell orders and historical trapped positions. Therefore, the market’s reaction near this zone—whether a volume breakout or a rejection—will be crucial. It will determine whether the rally can continue and challenge previous highs or needs to retreat and regroup.

Overall, Bitcoin, driven by policy optimism, macro easing, and capital inflows, has achieved a key technical breakout and punished shorts with unprecedented liquidation strength. The market landscape has subtly shifted, with spot buyers regaining dominance and adding fundamental support to the rally. However, investors should remain cautious, watch the battle at the $100,000 level, and be alert to potential short-term volatility. In the eternal game of bulls and bears in the crypto world, today’s winners may not be tomorrow’s, and only by respecting the market can one walk steadily forward.