5 Data Points Reveal Bitcoin’s True Price Direction
Over the past month, analysts have increasingly positioned Bitcoin in an ongoing bear market. However, five key data points show the market is going through a mid-cycle reset after the sharp rally to record highs in late 2025.
On-chain and ETF data now show the selling wave is losing force. Instead of long-term investors exiting, the data points to late buyers being flushed out while stronger holders absorb supply.
This matters because mid-cycle resets often mark the transition from panic selling to accumulation.
ETF Outflows Show Washout, Not Long-Term Distribution
US Bitcoin ETFs experienced their most violent selloff since launch during the first half of January. After strong inflows on January 2 and January 5, which brought in more than $1.1 billion combined, ETFs flipped sharply negative.
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Over the next three sessions, more than $1.1 billion left the funds.
This pattern is classic capitulation or washout. Investors who bought ETFs during the October and November rally entered when Bitcoin was near all-time highs. When price failed to hold above $95,000, many of those positions moved into losses. Redemptions followed quickly as risk managers and short-term traders cut exposure.
Importantly, this was not steady, months-long outflow behavior that defines bear markets. It was a fast, concentrated flush. That type of selling often exhausts itself because it removes the weakest holders first.
Recent data already shows ETF flows stabilizing, which suggests the forced selling phase is nearing completion.
In market cycles, this type of ETF washout typically precedes sideways consolidation and eventual recovery.
ETF Cost Basis Near $86,000 Now Anchors Price
CryptoQuant’s ETF drawdown chart shows that the average realized price of Bitcoin held by ETFs is close to $86,000. That means the bulk of ETF investors, who entered since the October peak, are now close to break-even.
This level is critical. When price trades near the average cost of the largest marginal buyer group, selling pressure usually drops.
Investors who already took losses have exited. Those still holding tend to wait for a rebound rather than sell at a small loss.
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Historically, these cost-basis zones act like gravity. When Bitcoin falls too far below them, dip buyers step in. When price rises far above them, profit-taking increases. Right now, Bitcoin sits only slightly above this ETF anchor.
That explains why the market has stabilized around $88,000 to $92,000 even after billions of dollars left ETFs.
The ETF cost basis has become a structural support level, which is typical during mid-cycle resets rather than bear market breakdowns.
BlackRock’s Coinbase Transfers Reflect Redemption Plumbing
Blockchain data shows BlackRock moved 3,743 BTC and 7,204 ETH into Coinbase Prime. At first glance, that looks like institutional selling.
However, ETF mechanics matter. When investors redeem ETF shares, the fund must deliver Bitcoin to authorized participants. Coinbase Prime serves as the custody and settlement hub for that process.
As redemptions surged last week, BlackRock had to move BTC and ETH to meet those obligations.
This flow reflects demand for liquidity, not a directional bet by BlackRock. The firm does not decide when investors redeem. It simply processes withdrawals. The timing of these transfers aligns exactly with the heavy ETF outflows seen in early January.
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In bear markets, you see funds actively reduce exposure for months. Here, what we see is short-term investors exiting and ETFs settling those trades.
That fits a reset, not a structural exit by institutional capital.
Coinbase Premium Shows US Institutions Hit Pause
The Coinbase Premium Index turned sharply negative on January 12. This means Bitcoin is trading cheaper on Coinbase than on offshore exchanges.
Coinbase serves mainly US institutions and high-net-worth investors. When the premium is positive, it shows aggressive buying from American funds.
When it turns negative, it means that demand has cooled.
Right now, that cooling makes sense. ETF investors just took heavy losses. Many funds are waiting for flows to stabilize before re-entering.
However, the absence of buying does not equal heavy selling. Spot BTC is not flooding Coinbase. It is simply not being chased higher.
In mid-cycle resets, institutional buyers often step aside while weaker hands get flushed. They return once price stabilizes. That pattern fits what the Coinbase Premium shows today.
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Exchange Netflows Confirm Supply Is Being Absorbed
The 30-day average of Bitcoin exchange netflows has reached its highest level since October. More Bitcoin is moving onto exchanges, which usually signals selling pressure.
However, context matters. This supply is largely coming from ETFs unwinding positions and from arbitrage desks settling redemptions. It is not coming from long-term holders rushing to exit.
Despite this heavy inflow, Bitcoin price has not collapsed. It has held in the low $90,000 range. That tells us buyers outside the ETF market are absorbing the supply. This includes global traders, offshore funds, and long-term accumulators.
When selling hits the market, but price holds, it usually signals redistribution from weak hands to stronger ones. That process is typical in mid-cycle resets.
What’s Next for Bitcoin Price?
All five data points point to the same conclusion. Bitcoin is digesting an ETF-driven shakeout. Late buyers exited. Long-term holders stayed.
As long as Bitcoin holds above the $86,000 ETF cost basis, the structure remains constructive. In that case, price can consolidate and attempt a move back toward $95,000.
If ETF flows turn positive again, a test of $100,000 becomes likely later in the quarter. A deeper selloff would require a renewed wave of ETF redemptions.
So far, the data shows that phase is already fading.
