As macro uncertainty grows, weak metrics worry top-caps.
Notably, that tension was on full display this week. It started with the CPI coming in below expectations, which immediately flipped the market bullish.
The result?
Classic sweeps were triggered across exchanges.
Short squeeze lifts BTC to $95k
Over $500 million in shorts were liquidated, marking the largest short squeeze since the October crash. Meanwhile, Bitcoin [BTC] popped 4.57%, closing the day around $95k, a level not seen since mid-November.
That said, the bigger question now is whether this rally has legs.
Technically speaking, BTC spent nearly seven weeks consolidating around the $90k before pushing higher into the $95k range, marking a classic post-range expansion. Still, a clean V-shaped recovery feels unlikely.
Looking ahead, the Supreme Court’s tariff verdict scheduled for the 14th of January adds fresh macro risk, potentially punching a hole in government revenues and triggering what some are calling a major “fiscal shock.”
Matt Mena, Crypto Research Strategist at 21Shares, told AMBCrypto,
“This Wednesday’s expected Supreme Court ruling on federal tariff authority will be a massive volatility driver for both the dollar and risk assets.”
He continued,
“Meanwhile, in D.C., the GENIUS and CLARITY Acts are moving toward critical Senate votes; the formalization of a U.S. DeFi framework and digital asset market structure would provide the institutional “seal of approval” needed for the next leg of the bull cycle.”
Against this setup, Bitcoin’s rally is set to face a real test. In fact, on-chain metrics and whale positioning suggest BTC is unlikely to push through unscathed, leaving the next few hours primed for elevated volatility.
On-chain data shows Bitcoin’s momentum is still speculative
In the current macro setup, a divergence is the last thing bulls want to see.
Yet, that’s exactly where Bitcoin sits right now. Looking closer, CoinMarketCap noted that aside from Strategy [MSTR], most BTC DATs have stepped back, keeping corporate demand largely on the sidelines.
Meanwhile, CryptoQuant highlighted rising pressure on key support levels, as new BTC whales push deeper into unrealized losses, dropping their unrealized profit ratio below zero for the first time since May 2022.
Notably, that move triggered nearly a 70% pullback in Bitcoin at the time.
That said, a repeat seems unlikely, as ETF demand is still holding strong.
However, current flows suggest (echoing CoinMarketCap) that BTC’s momentum is being driven more by derivatives than by Spot accumulation.
Mena noted,
“Bitcoin is being repriced as an international reserve that remains indifferent to sovereign border disputes. This “neutrality” is being reinforced by record-low exchange reserves and a steady return of ETF inflows, which are effectively floor-pricing the asset regardless of short-term rate volatility.”
This “divergence” comes at a tricky moment. As volatility ramps up ahead of the tariff ruling, these speculative flows could trigger another major liquidity event, quickly unwinding the optimism built around the CPI data.
Final Thoughts
- Speculative on-chain flows & whale losses leave Bitcoin vulnerable, with momentum driven more by derivatives than Spot accumulation.
- Rising macro volatility ahead of the tariff ruling could trigger a liquidity event, quickly undoing CPI-driven optimism.
