#BitcoinSix-DayRally

Bitcoin's Six-Day Rally: A Genuine Bull Market Move or Just a Short Squeeze?

January 7, 2026 – Bitcoin (BTC) has posted impressive gains in the opening week of 2026, climbing for six consecutive days from around $87,000–$88,000 at the start of the year to a high near $94,700 before pulling back slightly. As of today, BTC is trading around $92,500–$93,000, supported by robust spot Bitcoin ETF inflows and increasing on-chain volume. The rally has sparked debate: Is this the start of a sustained bull market, or primarily a short squeeze fueled by liquidations? Should investors buy now or wait for a dip?

Key Drivers Behind the Rally

The surge began on January 1–2, with Bitcoin rebounding sharply from late-2025 lows. Key factors include:

Record ETF Inflows: U.S. spot Bitcoin ETFs saw approximately $1.2 billion in net inflows over the first two trading days of 2026. This includes $471 million on January 2 and a massive $697 million on January 5 – the largest single-day inflow since October 2025. Funds like BlackRock's IBIT and Fidelity's FBTC led the charge, reversing the $4.57 billion outflows from November–December 2025.
Institutional and Retail Demand: New-year portfolio rebalancing, tax-loss harvesting reversals, and geopolitical safe-haven bids (e.g., amid U.S.-Venezuela tensions) have boosted risk appetite. Options traders on platforms like Deribit are heavily betting on $100,000+ calls expiring in January.

Technical Momentum: Spot volumes have risen, and short liquidations contributed around $180–200 million in forced buying over the past week.
Analysts like Fundstrat's Tom Lee predict a new all-time high (beyond $126,000 from October 2025) by the end of January, citing resilient U.S. economic growth and AI-driven productivity.
Bull Market Signal or Short Squeeze?

While short squeezes played a role – with leveraged shorts getting liquidated as prices broke key resistances – the rally appears driven more by organic demand:

Genuine Institutional Buying: ETF inflows directly translate to spot Bitcoin purchases, signaling long-term conviction rather than speculative leverage. Historical patterns show sustained inflows often mark local bottoms and kickstart bull phases.

Short Squeeze Element: Yes, liquidations amplified the move, but without underlying demand from ETFs and spot buyers, it wouldn't have sustained six days.

Overall, this looks like the early stage of a bull market resumption, combining short covering with real capital rotation into crypto after 2025's late pullback.

Buy Now or Wait for a Pullback?
Bullish Case: Strong momentum, solid supports at $90,000–$91,000, and ongoing inflows suggest limited downside. A break above $95,000 could quickly target $100,000.

Cautious View: Profit-taking has already caused a minor dip today, and Bollinger Band compression hints at potential volatility. A healthy retrace to $90,000 could offer a better entry.

In summary, the six-day rally is largely backed by genuine bull market dynamics – led by institutional ETF demand – with short squeezes providing extra fuel. This sets a positive tone for 2026, though volatility remains high. Depending on your risk tolerance, entering now is reasonable, but waiting for a shallow pullback could be prudent.