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Over the past month, analysts have increasingly placed Bitcoin in a continuing bearish market. However, five key data points show that the market is undergoing a mid-cycle reset after a strong rally to record highs by the end of 2025.
Chain and ETF data now show that selling is raging. Instead of long-term investors exiting, the data suggests that late buyers were pushed out while stronger holders absorbed the supply.
This is important because a mid-cycle reset often represents a transition from panic selling to accumulation.
ETF flows show loss of earnings, not long-term distribution
I saw US Bitcoin Funds Its biggest sale since launch was during the first half of January. After a strong inflow on Jan. 2 and Jan. 5, bringing in more than $1.1 billion combined, passive index funds turned sharply.
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Over the next three sessions, more than $1.1 billion left the funds.
This style is a classic of the da-in or over-wash type. Investors who bought ETFs got in during the rally in October and November when Bitcoin was near its all-time highs. When the price failed to hold above $95,000, many of those positions became lost. Recoveries quickly followed as risk managers and short-term traders reduced exposure.
Importantly, this was not the constant outflow behavior that defines persistent bear markets. It was a fast and focused flow. This type of Sales often sell out because Eliminate the weakest carriers first.
Recent data already shows ETF inflows stabilizing, suggesting that the forced selling phase has come to an end.
In market cycles, this type of ETF loss usually precedes a sideways consolidation and eventual recovery.
The cost basis of the ETF is about $86,000 now as the price of the title
CryptoQuant’s ETF withdrawal chart shows that the average price of Bitcoin realized in ETFs is close to $86,000. This means that the majority of ETF investors, who entered from the October peak, are now close to breaking out.
This level is crucial. As the price approaches the average cost of the largest marginal group of buyers, selling pressure usually decreases.
Investors who had already suffered losses left. Those who still have control tend to wait for a recovery rather than sell at a small loss.
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Historically, these cost-based areas functioned like gravity. When Bitcoin falls too far below these areas, deep buyers enter. When the price rises above this percentage, the profit increases. Currently, Bitcoin sits just above this pillar in the ETF.
This explains why The market settles between $88,000 to $92,000 Even after billions of dollars left the ETF.
The fund’s cost base has become a structural support level, which is common during a mid-cycle reset, but not during Bear market crash.
BlackRock Transfers on Coinbase Reflect Recovery Plumbing
Blockchain data shows that BlackRock transferred 3,743 Bitcoin and 7,204 Ethereum to Coinbase Prime. At first glance, this looks like an institutional sale.
However, the mechanics of ETFs are important. When investors redeem ETF shares, the fund must deliver Bitcoin to authorized participants. Coinbase Prime acts as the custodian and settlement center for this process.
With recoveries rising last week, BlackRock was forced to transfer Bitcoin and ETH To fulfill these obligations.
This influx reflects demand for liquidity, not a trend bet by BlackRock. The company does not decide when investors will receive refunds. It simply processes the clouds. The timing of these transfers aligns perfectly with the heavy ETF flows seen in early January.
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In bear markets, you see funds reduce exposure for several months. Here, what we see is short-term investors exiting and ETFs settling those trades.
This corresponds to a reset, not a structural outflow of institutional capital.
The feature of Coinbase shows that the institutions of the United States have stopped
The Coinbase Premium Index turned very negative on January 12. This means that Bitcoin is trading cheaper on Coinbase compared to offshore exchanges.
Coinbase primarily serves US institutions and high net worth investors. When the premium is positive, it shows aggressive buying by US funds.
When it turns negative, it means that demand has cooled.
Currently, this refresh makes sense. ETF investors suffered huge losses. Many funds are waiting for flows to stabilize before re-entering.
However, the absence of buying does not mean heavy selling. Instant Bitcoin is not flooding Coinbase. It is simply not pursued at the top.
In a mid-cycle reset, institutional buyers often pull back as weaker hands are removed. Come back when the price stabilizes. This pattern matches what the Coinbase Premium indicator is showing today.
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Exchange flows confirm that supplies are absorbed
The 30-day average net inflows on Bitcoin exchanges reached their highest level since October. More Bitcoin is moving to the exchanges, and this usually indicates selling pressure.
However, context is important. This supply comes largely from ETF positions and benchmark settlement operations that establish corrections. And not from the old fund holders running away.
Despite this strong influx, the price of Bitcoin did not collapse. The price remains at a minimum of $90,000. This indicates that 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 the price is fixed, it usually indicates a redistribution from weak hands to stronger hands. This process is common in the reset cycle.
What is next for the price of Bitcoin?
All five data points point to the same conclusion. Bitcoin absorbs ETF-led transformation. Late buyers have moved on. Long haul carriers have been on site.
While Bitcoin maintains its $86,000 ETF cost base, the structure remains constructive. In this case, the price could rally and try to return towards $95,000.
If ETF flows turn positive, a test of $100,000 becomes possible later in the quarter. A deeper selloff will require a new wave of ETF redemptions.
So far, the data shows that this phase has already cleared.
