Bitcoin [BTC] has started the week on a bullish note, breaking above the $90,000 region for the first time since December 12 and holding this level for four consecutive days.
This continued movement signals a strengthening of demand and an improvement in price stability at higher levels.
Market dynamics continue to shift in favor of the bulls, especially as Bitcoin steadily closes the gap on the losses previously suffered by short-term holders. This shift reflects improving sentiment and a gradual recovery in short-term positioning.
Short-term losses continue to decline
The Short-Term Holder Net Unrealized Profit/Loss (STH NUPL), an indicator used to measure the portion of Bitcoin held by short-term investors that is making a profit or a loss, has continued to shrink.
This trend indicates that losses among short-term holders are decreasing as the price recovers.
Bitcoin’s STH NUPL is now approaching zero, indicating that most short-term holders are close to breakeven as Bitcoin trades around $93,450 at the time of writing.
Data from Alpharactal shows that the zero level corresponds to a Bitcoin price of around $99,000. This zone marks a crucial breakeven point for short-term investors. However, it does not automatically confirm a bullish continuation.
For that to happen, the price must move decisively above this level. Moreover, the country needs to maintain its strength as it approaches the $100,000 mark.
Only then would the outlook shift to a more convincing bullish trend.
Source: Alpharactal
Alphractal noted,
“Historically, the area around 0 acts as resistance for this measure. A transition into positive territory will only occur if BTC breaks above and holds the price realized by the short-term holder.”
With Bitcoin currently about $5,500 away from this threshold, the focus remains on whether bulls will intervene with enough conviction to push the price above the zero line.
A shift in the sentiment of short-term bondholders can only be confirmed if this condition is met.
Investors return to accumulation
Buying activity has increased among two major investor cohorts: institutional clients and retail spot investors.
Institutional investors started the week remarkably strong, with US spot Bitcoin ETFs intake a combined net inflow of $452.4 million over two trading days between January 5 and 6.
Most of this activity occurred on the first day, with $697.25 million worth of Bitcoin added to institutional portfolios. This came after consecutive sell-offs totaling $1.11 billion, signaling a clear shift towards accumulation.
The spot market reflects a similar pattern. After four consecutive days of selling between January 2 and 5, during which $373.5 million worth of Bitcoin exited the market, buyers have returned with renewed interest.
Source: CoinGlass
Spot Exchange Netflow factswhich tracks Bitcoin’s movement in and out of exchanges, shows that $481.76 million worth of BTC has been withdrawn from exchanges into private wallets.
This behavior is commonly associated with long-term investment strategies and is considered a positive signal because it reduces the supply available on centralized exchanges.
Continued buying pressure from both spot investors and institutional clients would play a crucial role in supporting further upside potential and strengthening Bitcoin’s positive price structure.
Global liquidity adds macro support
In addition to the behavior of the chain and the behavior of investors, macro liquidity conditions are also starting to align. The global M2 money supply has continued to rise, improving the broader liquidity environment for risky assets.
M2 represents the amount of money that is immediately available for deployment in the economy or that can be quickly converted for spending and investment.
Historically, rising M2 levels have supported assets like Bitcoin as they indicate increased liquidity and potential capital inflows.
Source: Alpharactal
However, this effect is not immediate. It often takes several months for an expansion in the money supply to translate into higher asset prices. While the impact of rising M2 has not yet fully materialized, the broader direction remains supportive.
If current trends continue, Bitcoin could continue to close the gap between the current price level and the STH NUPL breakeven zone, which is near $99,000.
Improving the positioning of short-term holders, renewed institutional inflows, growing spot market demand and increasing global liquidity collectively strengthen the case for further upside potential in the short to medium term.
Final thoughts
- Short-term holders are approaching the breakeven point on the charts, a development that could boost market confidence in Bitcoin.
- Institutional clients and retail investors are returning to the market and buying Bitcoin after many days of sustained selling pressure.