Bitcoin surged to $94,000 as key indicator subtly shifts to positive for the first time since October.

Bitcoin ETFs attracted $1.2 billion during the initial two trading sessions of 2026, coinciding with BTC‘s ascent to $94,000, reflecting a 7% increase in just a few days. The narrative unfolded naturally: institutional investments surged, and prices followed suit.

However, this correlation conceals a more intricate structural transformation taking place within options markets, on-chain movements, and derivatives positioning, indicating that the rally’s roots extend beyond mere spot demand.

Investing in convexity

Jeffrey Park, Chief Investment Officer at ProCap BTC, noted that Bitcoin options call skew shifted positive on January 1 for the first time since October. He highlighted a signal that institutional traders monitor more closely than assets under management (AUM) figures: the cost of upside protection compared to downside hedges.

Call skew assesses the difference between the implied volatility of out-of-the-money calls and that of similar puts, generally represented as a 25-delta risk reversal.

When this spread becomes positive, traders aggressively seek upside exposure over downside protection. The market imposes a premium for convexity in one direction, acting as a real-time indicator of where participants anticipate the price to break.

A positive call skew indicates a genuine appetite for leverage on the upside, such as institutions positioning for breakouts, retail investors pursuing momentum, or structured products requiring call inventory.

The mechanical effect amplifies this: when dealers sell those calls, they hedge by purchasing spot or futures as prices increase, generating a feedback loop that reinforces rallies.

The January shift in Bitcoin options skew not only mirrored sentiment; it redefined the derivatives environment in a manner that makes upward movements self-reinforcing through delta-hedging flows.

Bitcoin options call skew flipped positive on January 1 for the first time since October, indicating that traders are paying more for upside protection. Image: Amberdata/Jeff Park

Supply reallocation and leverage dynamics

Checkonchain presented a different perspective on the rally on January 5, emphasizing “significant supply reallocation occurring behind the scenes.”

Top-heavy supply decreased from 67% to 47%, while profit-taking gradually declined from 30,721 BTC on November 23 to just 3,596 BTC by January 3.

The market wasn’t merely climbing; it was rebalancing, with concentrated holders distributing to buyers willing to take on supply without immediate profit flipping.

When profit-taking diminishes while prices rise, it indicates that new participants are accumulating with longer investment horizons.

The reduction in realized profit alleviates sell-side pressure that typically limits rallies. Recent buyers entered at prices closer to current levels, forming a group less inclined to exit for marginal gains.

BTC-denominated realized profit dropped from 30,721 BTC on November 23 to 3,596 BTC by January 3, according to Checkonchain data.

The futures market added another dimension. CoinGlass data revealed $530 million in liquidations within 24 hours, with $361 million coming from shorts, a classic short squeeze that is supporting the recent rally.

However, this squeeze transpired in a low-leverage climate. Checkonchain data indicates that crypto-native leverage fell from 5.2% to 4.8% between December 31 and January 5, while global leverage decreased from 7.2% to 6.6%. Futures leverage saw a slight increase to 3.3% but remained well below historical highs.

When shorts are squeezed in a low-leverage environment, the unwind removes resistance without introducing systemic fragility on the long side.

The absence of excessive leverage means the rally isn’t reliant on borrowed capital that would need to be unwound at the first signs of weakness. Spot-driven rallies don’t encounter the same reflexive deleveraging risks as futures-heavy movements.

Crypto-native leverage ratio decreased from 5.2% to 4.8% between December 31 and January 5, based on Checkonchain data.

The interaction between the mechanics of call skew repricing upside risk, supply consolidating into stronger hands, and leverage remaining compressed creates a scenario where catalysts like ETF inflows enhance rather than initiate the movement.

The ETFs offered a narrative foundation and a point of liquidity entry, but the structural conditions that enable prices to maintain gains were already established.

Bitcoin’s breach of $94,000 represented the convergence of multiple structural indicators suggesting greater conviction behind the movement than spot flows alone would indicate.

The post Bitcoin ripped to $94,000 as critical metric quietly turns positive for first time since October appeared first on CryptoSlate.