Bitcoin challenges $100,000: Market battles amid cooling inflation and geopolitical risks

Late-night US inflation reports brought a cool breeze to the market: the latest Consumer Price Index data shows that inflation has not accelerated, easing concerns about aggressive Federal Reserve rate hikes.

Market analysts observed that when the US State Department issued a warning for citizens to evacuate Iran immediately, Bitcoin’s price trend responded accordingly, reaffirming its role as “digital gold” seeking safe-haven status amid geopolitical uncertainties.

Macroeconomic Outlook

From a broader macroeconomic perspective, Bitcoin is navigating a complex and contradictory tide. Concerns about inflation have eased, but the risk of stagflation across the economy is mounting.

According to research reports from multiple brokerages, the US economy in 2026 may exhibit a “cooling first, heating later” pattern. Economic slowdown coexists with ongoing fiscal and monetary easing, with the core contradiction being the widening gap between the “hot” AI industry and the “cold” traditional real economy. CITIC Construction Investment Securities also pointed out that the market expects a rebound in US inflation in 2026, but overall, the actual risk of rising prices for goods and services is not significant. Commodity prices may struggle to sustain gains, while service inflation could remain stable, as leading indicators suggest. However, Guojin Securities paints a different picture: to win the midterm elections, the US government might adopt more accommodative fiscal policies, potentially pushing the deficit rate above 6%.

Under the policy mix of “loose monetary” and “loose fiscal” policies, structural divergence in the economy could intensify, and upward inflationary pressure remains a tail risk that cannot be ignored at certain stages.

ETF Capital Flows and Institutional Movements

Recently, market momentum has been strongly reflected in the capital flows of spot Bitcoin ETFs. The start of 2026 did not continue the strong momentum seen earlier, with significant fluctuations in fund flows.

According to the latest data, in the first full trading week of 2026, US spot Bitcoin ETFs experienced a net outflow of approximately $681 million. The largest single-day redemption occurred on January 7, with outflows reaching $486 million. This shift is particularly notable because just a few days earlier, on January 2, similar products recorded a net inflow of about $471 million.

Market analysts attribute this change to rising macro uncertainties. As expectations for rate cuts in the first quarter cooled and geopolitical risks increased, investors’ risk appetite generally declined. They are closely watching upcoming CPI data and Federal Reserve policy guidance for clearer signals. However, despite cautious market sentiment, the channel for institutional entry remains open.

Recently, news emerged that Morgan Stanley has submitted an application to the SEC to launch a spot cryptocurrency ETF tracking both Bitcoin and Solana. Previously, Bank of America had also permitted its wealth advisors to recommend specific Bitcoin ETF products.

On-Chain Data and Market Structure

Diving into the blockchain network itself, on-chain data provides an excellent window into the underlying “health” of the market. After a correction at the end of 2025, the Bitcoin market entered 2026 with a clearer structural profile.

According to Glassnode’s on-chain insights report, a key positive signal is that profit-taking pressure has significantly eased. In December 2025, daily realized profits (7-day moving average) fell sharply from the Q4 peak of over $1 billion to about $184 million. As seller pressure eases, the market can seek new directions under healthier supply and demand conditions. However, a structural challenge remains: the current market is concentrated in an area where recent high-cost buyers are densely distributed. This means that further price increases will inevitably face “natural friction” from these investors’ profit-taking sales. Any sustained bull market requires sufficient time and resilience to absorb this supply.

The derivatives market also shows early signs of a shift in sentiment. The skew in options markets is normalizing, indicating that market risk appetite is shifting from purely defensive hedging to participation in upside potential.

Additionally, changes in market maker positions are noteworthy. Currently, in the $95,000 to $104,000 price range, market makers’ gamma has turned net short.

Geopolitics and Safe-Haven Narratives

Geopolitical tensions, especially recent turmoil in the Middle East, have directly impacted Bitcoin’s market narrative. Bitcoin exhibits its typical “dual nature”: as a risk asset influenced by macro conditions, and as an alternative asset sought under geopolitical pressure. When the US State Department issued a security warning amid escalating Iran tensions, the demand for Bitcoin as a safe haven was ignited. This reaction again confirms its characteristic of operating on a decentralized network—uncontrolled by any single government—which enhances its appeal to investors during increasing global uncertainties.

Historically, such events tend to stimulate demand for assets viewed as “safe harbors.” Although Bitcoin’s correlation with traditional safe-haven assets like gold is not fixed, its store-of-value narrative tends to strengthen during specific risk events. Investor behavior also adjusts accordingly. Institutional analysts note that in the face of geopolitical risks, traders are reassessing their risk exposure in portfolios. While Bitcoin may face short-term pressure due to overall risk aversion, its long-term narrative as a non-sovereign, censorship-resistant asset is gaining more attention.

Market Outlook and Key Thresholds

Looking ahead, the market is focused on several key price and psychological thresholds. The primary hurdle for bulls is whether they can continue to regain and hold above the short-term average cost basis, currently around $99,100. Glassnode’s analysis suggests this will be a critical signal confirming a shift from defensive deleveraging to a constructive trend. If prices remain below this level, market confidence may struggle to recover effectively, increasing the risk of further pullbacks.

In this context, $100,000 remains a powerful psychological and technical milestone. The options market’s open interest indicates that the defensive hedging constraints have been significantly cleared due to the expiration of many options at year-end, creating conditions for prices to more freely reflect new market sentiment. Currently, long-term holders’ selling pressure has eased notably, and institutional demand for spot ETFs is showing early signs of recovery. Open interest in futures is also gradually rising, indicating derivatives participants are re-establishing risk exposure.

Bitcoin is currently quoted at $96,469.50, up 1.30% in 24 hours, about 23% below the all-time high of $126,080. Market makers in the options space are prepared for strong performance within the $95,000 to $104,000 range.

The market is holding its breath, awaiting whether this symphony of macro data, geopolitical conflicts, and market microstructure will produce the next crescendo that will ring through the ten thousand-dollar mark.